The Daily Tribune - Sin Tax Law a failure — Marcos

22 June 2013

By Angie M. Rosales | The Daily Tribune

The-Daily-TribunePresident Aquino’s pet bill unrelentlessly pursued last year for legislation in Congress and rushed though by Sen. Franklin Drilon, who had taken the place of Sen. Ralph Recto as committee chairman after Recto’s resignation, known as the reformed “Sin Tax” Law, is a dismal failure as it has not generated the hefty revenue expected to be collected this year, Sen. Ferdinand “Bongbong” Marcos Jr. said yesterday.

With only six months left for this year, Marcos expressed strong reservations on whether the government can still realize the P33.9 billion supposed “additional” revenues from tobacco and alcohol products.

Smuggling of cigarettes, many in the Senate had warned earlier, would be rampant and smuggled goods don’t pay any taxes, which would not do the Sin Tax Law any good.

“The (law on the) sin taxes has been passed and they have yet to collect a single centavo because precisely of the things I’ve brought up during the debates on the floor, that smuggling will be pervasive in the country and sales of products (covered) will decrease...all of the things that I’ve said have come true,” he said.

The same argument was raised by then Senate President Juan Ponce-Enrile and other senators who had warned that the taxes expected to be raised from the sin tax will not be realized due to the proliferation of smuggled cigarettes.

“And that is why as the collections as I pointed out, both as a quantitative solution and also as a qualitative argument, clearly have shown to be flawed,” he pointed out.

Marcos was one of those senators who staunchly fought against the approval of the measure last December.

His region is a tobacco producing region. The reformed Sin Tax Law is projected to generate P248.49 billion over the next five years.

During the height of the debates on the measure, Marcos had already pointed out what he noted as flaws and inadequacies in the then bill which will only prove to be ineffective in raising the needed revenues that will fund the health-related government expenditures.

The senator said the bill used an impractical approach by imposing a high price on cigarettes.

Marcos refused to subscribe to the government’s position that consumers will still patronize cigarettes despite its being already expensive and it is likely that consumers will resort to buying smuggled or counterfeit items.

The government, in trying to justify the six tax claimed it was doing this as a health measure, as smoking is considered harmful to the smoker, active and passive.