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Hard fight over ‘sin tax’ seen

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Sen. Franklin Drilon, acting chairman of the Senate ways and means committee, has warned that the differing targets set by the two chambers could pose some “difficulty” during the bicameral conference committee next week.

Expect some “hard bargaining” between senators and congressmen over the amount of excise tax to be imposed on alcohol products when Senate and House representatives meet to reconcile their versions of the sin tax bill.

Sen. Franklin Drilon, acting chairman of the Senate ways and means committee, has warned that the differing targets set by the two chambers could pose some “difficulty” during the bicameral conference committee next week.

The Senate approved an increment tax of P16 billion from alcohol products, including fermented liquor like beer and distilled spirits.

The House of Representatives’ version raises the tax take to only P5 billion.

“That is where we (the senators) expect some hard bargaining… mostly on the alcohol side,” Drilon told the Kapihan sa Senado forum on Thursday.

60-40 ratio

 

Drilon said it was important that the 60-40 ratio between tobacco and alcohol products in the sin tax bill be maintained.

If the House insists on the P5-billion target for alcohol, the ratio would be severely skewed, he said.

Told that the House ways and means chairman Isidro Ungab had indicated a willingness to agree with the Senate’s figure, Drilon said that was “a good starting point.”

Drilon said he expects the negotiations to be easier on the incremental tax targets for tobacco products as the difference in the two chambers’ figures were “not substantial.”

The Senate version targets an additional P23.55 billion in taxes from cigarette products in 2013 while the House-approved bill sets the target at P26 billion.

Drilon said he would be “very pleased” if Ungab and company would accept the Senate-approved targets for tobacco products since senators “really went through (the sin tax bill) with a fine-toothed comb.”

He said the reconciled sin tax bill and the P2-trillion 2013 budget have to be signed into law by Nov. 28.

The Senate began deliberations on the budget Thursday.

Sen. Ralph Recto, the resigned chairman of the ways and means committee, earlier said bicam deliberations would focus primarily on the revenue gap. He noted that the Senate version seeks to raise around P40 billion in new revenues, while the House version sets a target of P31.5 billion.

House Majority Leader Neptali Gonzales II on Thursday said the P8.5-billion revenue-target gap should pose no problem for the bill’s passage.

He said bicam members could meet halfway, perhaps settle on half the amount, to ensure the swift ratification of the measure.

“I think it would not be difficult to find a middle ground,” he said in a phone interview.

Gonzales said the earliest that Congress can ratify the bicam report would be the first week of

December.

Higher credit rating

 

Also Thursday, Drilon said higher sin taxes could pave the way for a higher credit rating for the Philippines.

He quoted Internal Revenue Commissioner Kim Hernares as saying that credit-rating agencies were “waiting for (the sin tax measure) and it could be a final hurdle for our being in the investment grade.”

If the Philippines earns an “investment-grade” rating, global creditors would lower interest rates on its borrowings and allow the country to realign its debt payments. It could save for social services such as health and education,” explained Drilon. With a report from Christian Esguerra


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Tags: cigarettes , Congress , Government , Legislation , Public Health , Senate , sin tax bill , Smoking , Tobacco


  • Maldi2

    The way I look at it is that higher credit rating is FOR SALE!  That’s poor judgement on the part government if it succumb to external pressure at the expense of people’s money (SIN TAX) just to achieve a higher rating?  WTF!

  • http://pulse.yahoo.com/_GYYFBINDMTZHM6TDHPB667452M agustin

    tax more on on alcohol than the tobacco. here is the reasons. 1 hang over makes our workers less efficient and prone to accidents. 2 nightly drinking leads the group to plan a crime.3 drinks can converts a man into a violent behavior. 3 drinking leads to liver cancer.ask the expert Robin Padilla.

    • Guest

      Bacause the target is more than P1 trillion in revenue collections next year, tiyak mag-iisip na naman ng iba pang buwis sina Purisima and Henares.

  • http://twitter.com/marygracete marygarcete

    Will someone please explain to me why cigarette taxes are way higher than alcohol? A 60-40 ratio just doesn’t make any sense and you know what else doesn’t make sense; why these lawmakers are favouring the alcohol industry.  

  • JerryDJesus

    What’s higher credit got to do with the sin tax bill? Are credit rating agencies that dumb now that the passage of a single bill will result to automatic upgrade? Or did Kim Henares misunderstood what the credit rating agencies stated?

    The government programs in this bill hinges on the prospect that the government will collect the projected revenue. What if it can’t? Will there be an automatic downgrade of our credit rating also? We all know that this is a stupid bill. The “holier than though” and the “sin police” fighting for this bill are once again having an acute attack of self-importance. Increasing prices of cigarettes won’t stop people from smoking. They will just buy the cheaper brand or worst, the smuggled ones. What happens then to all those people dependent on the tobacco industry? 

  • conradoibarra

    It’s going to be a harder fight if the sin tax gets implemented, a harder fight to keep the local tobacco and alcohol industries afloat, or even alive.

    There is also no guarantee in the improvement of our credit-rating by merely the passing of a bill, one that clearly will have a detrimental effect on the local industry, therefore this bill might even be detrimental to our rating.

  • mitch ilano

    Our greedy legislators want to squeeze more revenues from us
    and tax everything– the food that we eat, the clothes that we wear, the house
    that we live in – if they could even the air that we breathe. Why not! When this
    government, one of the most corrupt and incompetent in the world, is free from
    any obligation to disclose where our taxes go. 

  • http://twitter.com/tetchiete Tetchie Te

    I think its more logical to police and tax alcohol more than tobacco. Some, if not most criminal heinous cases are done under the influence of alcohol. May narinig na ba kayong nang rape or pumatay dahil sa over smoking? 

  • http://www.facebook.com/profile.php?id=100003753813328 Kareen Duran

    Unless something is done with the culture of corruption in our shameful incompetent government, the exorbitant amount of tax these greedy legislators slap and squeeze from us will only, surely, go straight to their fat pockets. 

  • schmuckthat

    Higher credit rating? so may plano nanaman ang gobyerno nating mangutang? at para saan? para magpayaman pa sila ng lubos habang tayo’y kayod kalabaw sa pagbayad ng buwis. hay naku!

  • RoseValdos

    Ganoon nga ang mangyayari yung mga small players ng cigarette industry,
    mapipilitan silang magbawas ng workers or talagang mag-close na lang.

    • Guest

      Tiyak naman na yung ibang local cigarettes manufacturers diyan, magbabawas ng workers para makatipid sa operation cost. Paano na sila?

  • Guest

    The Senate completely ignored the plight of small cigarette makers like
    them, in favor of manufacturers of premium imported brands. Correct!

  • Guest

    Wala na ring magtitinda ng sigarilyo dahil mahal na ang presyo nito.
    Iyan ang domino effect ng high excise tax on cigarettes na yan.

  • emmaleyer

    At ano naman ang maitutulong ng gobyerno sa mga tobacco farmers na maapektuhan ng high excise tax sa cigarettes? Meron daw pero Malabo.

  • tercita_dless

    I’m sure mistarget na naman niyan sa Kim Henares. Knowing her puro projections lang hindi naabot ang mga target niya.



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