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NPC opposes Palace on hiking ‘sin tax’


04:25 AM February 27th, 2012

By: Gil C. Cabacungan, February 27th, 2012 04:25 AM

Going against the wishes of Malacañang, the administration ally Nationalist People’s Coalition (NPC) has decided to oppose a House bill seeking to raise taxes on so-called “sin products,” or alcoholic drinks and cigarettes.

Batangas Representative Mark Llandro Mendoza said the NPC had decided that the party would stand against the administration-backed House Bill No. 5727 authored by Cavite Representative Joseph E.A. Abaya because its proponents failed to address concerns on the massive job displacement that would arise from the proposal, which envisages a unitary tax scheme from the current four-tiered tax system.

Local distillers and cigarette makers, including  San Miguel Corp. which is chaired by NPC founder Eduardo “Danding” Cojuangco, warned that the 1,000-percent hike in taxes sought in the measure would drive local players out of business and render hundreds of thousands of employees jobless as local brands would lose their price advantage over foreign brands.

Malacañang has endorsed the bill as it would have the effect of raising an additional P400 billion in revenue during the last four years of President Aquino’s term and make up for the inability of the Bureau of Internal Revenue and Bureau of Customs to meet their targets.

The NPC is a member of the ruling coalition that is led by the Liberal Party which is headed by President Benigno Aquino III.

Mendoza said the bill’s proponents also failed to assuage fears that approval of the bill would lead to increased smuggling of low-cost cigarettes that would be priced out of the market with the imposition of a single tax.

He also said that there was no assurance the revenue raised would go toward easing rising health problems in the country as promised by the Department of Health.

The NPC bloc is expected to join lawmakers from the “solid North” or the tobacco-growing Regions I, II and III as well as members of the minority bloc who had earlier expressed their opposition to the government plan to raise sin taxes.

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