The Manila Times - Sky-high sin tax seen to worsen smuggling

16 November 2012

By Jefferson Antiporda and Jing Villamente | The Manila Times

A lawmaker on Thursday expressed belief that the substitute sin tax reform bill may even affect the current revenue the government is collecting from tobacco and alcohol products if the proponents of the measure will not change the projected revenue rates they have set.

Sen. Ferdinand “Bong-Bong” Marcos Jr. in an interview with reporters at the same time said that apart from failing to achieve the projected revenue of P40 to P45 billion incremental tax from sin products in the first year of implementation, the measure could also worsen smuggling.

Marcos noted that the incremental revenue of P27 billion from tobacco products as stated on the bill, is highly unlikely to be attained because the bulk of revenues the government collects comes from low priced cigarettes, the same tier the bill wants to kill by imposing extremely high tax.

He also rejected the claim of the Department of Finance that smokers of cheap cigarettes will shift to smoking more expensive products once the government imposes higher taxes which could generate the projected revenue.

Marcos said that it would be the opposite and apart from smokers not buying from the legitimate market, they will start looking for cheaper sources—smuggled cigarettes.

The lawmaker explained that once a much heavier levy on cigarette is imposed, producers, manufacturers and sellers would be forced to slowdown because of its prohibitive effect.

He also warned that the situation would be exploited by smugglers who will have a heyday dumping the local market with smuggled tobacco products, raking in huge profits without paying a single centavo to the government.

Spare our jobs!
Thus cried by a militant organization of workers, peasants and urban poor as they called on the Senate to wake up and stop the passage of the sin tax bill.

In a rally participated by 5,000 members of the Bukluran ng Manggagawang Pilipino (BMP) yesterday at the Senate grounds, the group said that the Senate is already dead as it has stopped from performing its mandate to uphold the interest of the poor Filipino people by ignoring their call to scrap the controversial bill.

Carrying coffins to symbolize their disgust over the Senate’s failure to heed their call to stop the passage of bill seeking the imposition of higher taxes on locally manufactured sin product, the BMP urged the senators to wake up and save the underprivileged from the ill-effects of the proposed measure.

“The Senate has become blind and deaf to our plight and pleadings. Not a single senator has the courage to meet and talk to us,” said Anthony Barnedo, secretary general of the Kongreso ng Pagkaskaisa ng Maralitang Lungsod which is a member of BMP.

The BMP, one of the convenor of the Peoples Coalition Against Regressive Taxation (PCART), began their campaign at the Senate when deliberations for the proposed bill started.

Gie Relova, secretary general of BMP said, “It is now clear for us how numb the Senators are at the workers’ grievances. It is now clear for us that no Senator will stand for the interest of the people for their livelihood and rights. It is now clear for us that this August hall of Congress is a graveyard and mausoleum of the aspiration and hope of the poor.”

“There is a very long list of anti-workers and anti-poor laws that was passed at the halls of the Senate. From the ratification of the GATT-WTO [General Agreement on Tariff and Trade-World Trade Organization], Visiting Forces Agreement to JPEPA. We will not be surprised that the new tax bill will also be passed,” said Relovar.

At the end of the program, the militants burned the red coffins to symbolize the burning down of the people’s illusion on the Senate as an institution for the people.