Northern bloc lawmakers oppose sin tax measure



Lawmakers from the tobacco-growing provinces in northern Luzon will block the passage of the sin tax reform bill next month unless its proponents agree to a compromise that could water down further the proposed increase in taxes on cigarettes and alcoholic drinks.

La Union Representative Victor Ortega said he met with Speaker Feliciano Belmonte Jr. last week to push the northern Luzon bloc’s proposal to adopt a three-tier tax system for cigarette products in place of the two-tier tax system approved in the House committee on ways and means three weeks ago.

“We are fighting not for any interest. We are fighting for the tobacco farmers,” said Ortega, citing the adverse impact of a two-tier tax system on low-cost cigarettes that use local tobacco as raw material.

“The Speaker will talk to them,” said Ortega, referring to the group of Cavite Representative Joseph E.A. Abaya, author of the sin tax reform bill, House Bill No. 5727.

Debates wrap up by June 7

The bill originally pushed for a single tax rate for cigarettes and alcoholic drinks whether locally made or imported, high priced or low priced, old or new brands.

Belmonte has made a commitment to President Benigno Aquino III to wrap up the ongoing plenary debates and pass the sin tax bill before Congress goes on hiatus on June 7.

Under the revised sin tax bill approved in the committee level, the Department of Finance (DOF) will impose two tax rates for tobacco products and three for alcoholic products depending on the product retail price.

Cigarettes selling for P11.50 per pack and less will be taxed P12 in the first year and P22 afterward. Cigarettes selling for more than P11.50 will be taxed initially at P28.30 and P30 in the second year.

Ortega said the northern bloc wanted to have the same tax structure as alcoholic products that have three tax brackets to cover low-, middle- and high-priced brands.

There are currently four tax brackets for sin products, with old and established local brands enjoying a tax advantage over new and incoming imports. The DOF wants this tax advantage abolished and the sin tax simplified in order to boost revenue collection. Gil C. Cabacungan

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  • Elio Madama

    If imported liquors (mainly wine) are taxes too high, revenge from others Countries will happen and exports from Philippines will also have higher taxes in those Countries.
    It will be a boomerang and at the end Philippines will loose.
    If this Administration don’t stop “inventing” new taxes 24/7 will soon “kill” the middle class.
    Rich and poor only.

    • CebuAnoNoyPi

      hindi ganyan mangyayari pre. kasi sa mga bansang pinagkukunan natin ng wine and ibang inumin, malaki din sa kanila ang tax dahil sinasadya ito para kumunti ang manginginom at nananabako. dahil napag-aralan na mas malaki ang nagagasto ng pamahalaan para sa health care dahil mas marami ang nagkakasakit pero hindi naman inaako nga mga tobacco at liquor makers ang kabayaran. so para sa mga hindi talaga mapigil ang pananabako at pag-iinom, nilalakihan ng gobyerno ang tax para dun din kunin ang anumang gagastusin sa health care.

  • Ommm

    If the prices of cigarettes triples i will quit cold turkey and you tobacco farmers will be jobless…as i smoke quite a bit….

    The DOF is not going to increase revenues by this silly bill, they will actually decrease. The poor are the group who drinks and smokes a lot, and the poor are a huge portion of this country. What else do they have to do with no jobs? Perhaps their 12 children per family can do with less food but they are dressed in rags now with bones sticking through. Another broken promise by this government to “help the poor”.

    All this will do is fuel inflation should it actually work. And put a lot of people in a very bad mood…

    • joeyrivera

       Where did you get your facts that the poor drink and smoke the most because they have nothing else to do since they are jobless. That is discriminatory.

      Cigarettes in North America cost about $9 per pack, there are still lots of rich and poor people that still smoke. A bottle of Tequila cost $40, imported beer about $2 per bottle and there are still lots of rich and poor people who drink.

      Increasing the SIN TAX will add revenue to the government coffers and will not deter those who drink and smoke nor will make them quit all together.

      • Ommm

        Perhaps you need to take a walk through a shanty village some Saturday night…

        They raised the price to $10 a pack in Canada with a sin tax and over 20% of the smokers quit.

        “Substantial scientific evidence shows that higher cigarette prices result in lower overall cigarette consumption. Most studies indicate that a 10% increase in price will reduce overall cigarette consumption by 3% to 5%. Youth, minorities, and low-income smokers are two to three times more likely to quit or smoke less than other smokers in response to price increases”…Wiki

        Thats 10%…now imagine what 300% is going to do…

      • joeyrivera

         I’ve seen people in shanties and at Greenbelt on Friday and Saturday night, the number of smokers and drinkers were just equal.

        The Canadian example you quoted was flawed because the 20% were buying their smoke across the borders, they did not quit. Especially now that they increased our day trip allowance to $200. Higher price will neither result in lower consumption nor will be the catalyst to quit your vices. What it does is it makes you more innovative on how you lower your cost. In my case I lower it by buying my booze from Buffalo when we go to Mass on the first Sunday of the month. I still buy most of it in Canada though.

        Canada increased our sales tax to 13% from 8% and Ontario increased the price of  my favorite beer, Innis and Gunn to $3.15 from $3 per 355ml bottle. Instead of quitting, I drink Dos Equis($2) or San Miguel($2.15) 80% of the time and Innis and Gunn 20% of the time. Lowered my cost and I still drink.

      • Ommm

        San Miguel($2.15)…lets equate that to a red horse here, P32 (500ml)

        Ontario minimum wage is around $10 now? so you earn roughly 5 beers an hour if you flip hamburgers,(lol)but a construction labourer earns $27/hr…13 beers an hour…104 beers per day

        At P32 per beer a construction labourer in Phil,earning P250-350 a day….would need to be earning P3328/day to have beer buying equality…this is before they triple the price….

        Not too many native Canucks will touch an American cig, and they are not a whole lot cheaper now anyway. What is news is the smuggling industry that has sprung up over the ST.Laurence through Indian reserves to advantage the duty free factor.

        Same will happen in Phil but with little marine patrol capability the doors will be wide open. Expect a huge black market to be born, as the tobacco industry here dies. Just as bootleg movies run like water here this black market will thrive with little enforcement…once local cops get their end…Filipinos certainly know how to get “innovative” as you know…

  • AdyMarty

    Dapat nga habang laganap ang kurakot ng gobyerno. ang buwis ay mababa total naman hinde bumabalik sa tao kundi sa dollar account sa ibang bangko sa abroad ng mga opisyal 

  • Ommm

    Politicians here are fond of copying U.S. laws word for word, their constitution and their train of thought. Many are too lazy or simply don’t think of this countries place in the global economy…or even it’s own.

    It’s true that decimating the tobacco industry, as the USA has done, will probably lower health cost. Nobody even knows by how much, it’s all speculation. It would first help if this country had an actual health system that covered all citizens 100% as Canada does, to justify reducing costs in that system.

    What this countries leaders fail to see is we are NOT the USA and can’t afford to throw away an agricultural sector. Bananas are rotting, the coconut industry is in a tailspin. The USA has a massive industrial/manufacturing base and tobacco is a drop in the bucket. The farmers here are not going to abandon their fields and go work for GM or Ford…

    Here is a partial report prepared for US congress.2002

    ! Total utilization of U.S.-grown tobacco has been declining since 1975, from
    1.941 billion pounds to 1.121 billion pounds in 2001 (a 42% drop in the farm
    ! Exports of tobacco leaf peaked in 1978 at 765 million pounds (farm weight),
    and then declined to an estimated 399 million pounds in 2002. This decline
    occurred during a time when world exports were growing. The U.S. share of
    world exports has declined from 27% in 1969 to 7% in 2002.
    ! Even when U.S. cigarette manufacturing output was growing, the use of
    domestic leaf was declining. Manufacturing use declined from 1.6 billion
    pounds in 1952 to 688 million pounds in 2001. Use of domestic leaf tobacco
    has declined because: the amount of tobacco in each cigarette is now about
    40% less than what it was 45 years ago; the total number of cigarettes
    consumed in the United States has declined from 640 billion in 1981 to an
    estimated 420 billion in 2002; and cigarettes now contain only about 52%
    domestic tobacco while they once contained more than 90% (a reflection of
    the declining competitiveness of U.S.-grown tobacco).

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