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The Manila Times - Congress OKs P35 billion sin tax revenue target for 2013

In The News
7 December 2012

By Llanesca T. Panti | The Manila Times

Congress has pegged the target government revenue from the proposed sin tax measure at P35 billion by next year, it was learned on Thursday.

This developed after the Bicameral Conference Committee on the sin tax bill agreed to a P35-billion target state revenue from the sin tax measure, which seeks to hike taxes on tobacco and alcohol/liquor products.

Of the P35 billion, 70 percent will come from tobacco products, while the remainder will be imposed on liquors.

Sen. Ferdinand “BongBong” Marcos Jr., who hails from tobacco-dependent Ilocos Norte province, made the disclosure at the sidelines of the Bicameral Conference Committee meeting on the sin tax bill held at the House of Representatives.

“We are yet to agree on everything but so far, we have agreed that the incremental revenue for next year will be at P35 billion. The only option that we had is the one that brought down the taxes on alcohol products compared with tobacco [products]. For 2013, the burden sharing on tobacco and alcohol will be 70-30, but I suspect that it [tobacco tax] would go up to as much as 90 percent by 2017. This [measure] is getting worse,” Marcos said in an interview.

The House version targets a P31.5-revenue, less than the Senate’s P39.5 billion expectation.
“So far, this [P35 billion] has been adopted by both Houses,” Marcos added.

Marcos then argued that if the administration really intends the Palace-backed sin tax measure to improve the health of the citizenry, the taxes on tobacco and alcohol products should increase at the same time so that we reduce those who smoke and drink.

“Their assumptions are wrong. At present, not a lot of people buy a pack of cigarettes worth P28—an amount provided in the sin tax. So, they will have nothing to collect. That’s the problem,” Marcos added, referring to the Department of Finance, which he claims backs the House version of the sin tax.

The Senate version of the measure proposed a 60-40 burden sharing system for tobacco and alcohol.

The 70-30 burden sharing scheme, Marcos stressed, would kill the tobacco industry.

“I don’t agree with the burden sharing but they don’t care. At this rate, they would kill the industry, put 2.5 million out of work. I don’t know if that is the intention but that will be the effect,” Marcos said.

“Yes, cigarette smoking is a health issue, but so is drinking alcohol. If you go easy on the alcohol taxes and go hard on tobacco, you are discouraging smokers but encouraging people to drink alcohol. That is not consistent,” Marcos added in closing.