Aquino junks protectionist provision in sin tax bill



President Benigno Aquino III has vetoed the provision in the sin tax reform law mandating manufacturers and sellers of tobacco products to buy at least 15 percent of their raw materials from local sources.

Sen. Franklin Drilon confirmed the veto to the Inquirer on Thursday.

Senate President Juan Ponce Enrile proposed the provision to protect the local tobacco industry from increases in the price of cigarettes due to the sin tax rate increases.

“That is correct. It was vetoed,” Drilon said when asked about a report that Mr. Aquino had vetoed the protectionist provision in the sin tax measure he signed into law on Friday.

Enrile, during the period of amendments of the sin tax measure in the Senate, proposed that 20 percent of tobacco raw materials of cigarette manufacturers and sellers be bought from local sources. The amount was lowered to 15 percent after the bicameral conference committee reconciled the provisions of the Senate and House versions.

“I am constrained to veto under Section 5 of the enrolled bill a paragraph that requires manufacturers and/or sellers of tobacco products to source at least 15 percent of their tobacco requirements from locally grown sources,” Mr. Aquino said in his message to the Senate on his signing of what is now Republic Act No. 10351.

The President said the provision would go against the requirements of Article 3 of the National Treatment on Internal Taxation and Regulation of the General Agreement on Tariffs and Trade (GATT) 1994.

Sen. Miriam Defensor-Santiago opposed the provision during the Senate deliberations because it would violate the GATT.

Santiago proposed that the clause “subject to amendments based on international treaty commitments” be interpreted to mean “subject to international obligations.”

Mr. Aquino also vetoed provisions directing the National Statistics Office (NSO) to determine which major supermarkets have the highest annual gross sales in Metro Manila from which the net retail price of alcoholic drinks and cigarettes shall be determined for purposes of the law.

“The paragraphs cannot be implemented as the NSO cannot, by law, determine and provide the Bureau of Internal Revenue with the list of major supermarkets with the highest annual gross sales in Metro Manila,” Mr. Aquino said.

He said the NSO was prohibited from doing so under Section 4 of the Commonwealth Act that mandates the confidentiality of information furnished to the NSO.

Get Inquirer updates while on the go, add us on these apps:

Inquirer Viber

Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.

  • zeroko

    I will sing a Christmas song to Lucio Tan. He will again reap billions of pesos in “you know what scheme.” He he he.

    • Turk Instein

      Is Lucio Tan a big businessman in your country? What scheme you talking about?

      • riganom

        Lucio Tan is a big chinese in our country.  He and the rest of his fellow chinese have been enslaving our country.  We filipinos like it though.  The more they enslave us, the more we like it.

    • boldyak

      if you sing a nsong to Lucio Tan, then most probably you are singing and dancing to Danding, his main business have been subjected to a lesser tax than lucio’s main busieness

  • Loggnat

    A presidential line veto on laws that he signs!! That’s a double edge sword that could be beneficial to the country if applied conscientiously and fairly but also a disaster if used and abused to favor unsavory, corrupt organizations and practices. Even the US president does have such power and luxury when he signs a bill into a law.  

    • Turk Instein

      Maybe Loggnat you should go back to school. Verify your comment for its accuracy. A president does not have the power to veto a bill?

      • Loggnat

        You obviously do not understand what a ‘line veto’ is. Aquino has the power to veto a provision or line that he does not like or conform with and remove it from the Bill before he signs it into a Law. But I could be wrong so double check it and google it. :)

      • acaldejr

        Turk Instein, please know your information before commenting.  Don’t pretend you know when you don’t realy know.  Tsk tsk tsk…

  • Garote

    Drilon, Santiago, Pnoy are showing that they are representing the interest of the foreign corporations,

    • Turk Instein

      How can they protect the foreigners when it’s so obvious that the Philippines has to comply to the GATT which said country has signed and agreed upon? The Philippines has to comply with international agreements.

      • Garote

        The Philippines is a sovereignty country. It can at anytime rescind any international agreement if it would put the  people and the nation in detriment, Bush had many times violate the GATT and continued to subsidize US industries for not to do it would destroy US economy, when he was still the US Pres. Rather than protecting our economy and the nation’s interest, our pres., and senators Drilion, Santiago, Cayetanos like to kiss the ass@s of corporate and pharmaceutical giants..

      • Jose Rizal


      • Tristanism

        “It can at anytime rescind any international agreement if it would put the  people and the nation in detriment.”

        I don’t see an instance where the law would put the nation in detriment.

      • Garote

        Because you are suffering from “voluntary blindness.” Like a person who is to difficult to awake because he pretends to be asleep.

      • Tristanism

        We’re talking about the sin tax bill here, right? Why dictate on how private business run their affairs? Wala namang illegal na nagaganap?

        So Bush violated GATT, good for him. Part of a governments “charm” in attracting investors is that they know that the country offers a level playing field for them and that the government will not meddle in their operation.

  • White24

    Resign PNOY

    • OFW28


      isama na dyan ang 15-20% VAT

  • Turk Instein

    Your comment and White24’s do not make sense. Maybe you both are emotional and attached to your own egos.

  • Turk Instein

    In my country we smoke but we do not use the same one your country use. It is not american brand. No one gets sick here with smoking.

  • Marshall

    supalpal si tatang JPE…

  • blainz

    I thought Miriam already corrected Enrile on that issue. Naisingit pa pala ni gurang.

    Good job by the president with the line-item veto.

  • Jose Rizal

    So the King of condoms & pills was told (by his KKK)…because of the hurdles of tax administration.  It’s not really the “protectionist” provision that violates GATT.  Other countries do not adhere to GATT, even if they’re signatories of it, because of the local economy considerations.  “Because it violates GATT” is bullshit, but because he didn’t quite study it, that’s why he just vetoed it. “GATT”?…other signatory countries, to include the US, is not taking it hook-line-&-sinker (esp on steel)…where’s the country’s sovereignty?
    Pag bobo at tamad ang panguluhan, ganun din ang mga tauhan…

  • KappaPhiPhi

    paano papasok ang BAT if that clause is there. veto, of course.

  • Jose Rizal

    It’s clear that Kim Henares and The King of Condoms & Pills and Sex Education, are confused how to administer the Law.
    The BIR don’t have the database, that’s why the ignorant King of Condoms, Pill & Sex Educ, ask the NSO to gather the data.  If they don’t know where to get the data, where did they get all the data to come up with the economic progress their talking about…
    Hahahahahahahaha!  “In violation with GATT?”  What an easy escapegoat…
    Hahahahahahahaha!  Super TANGA’ng presidente….

    • Ramil Abalon

      Jose Rizal daw baka jose pidal

      • Jose Rizal


    • $25214711

      You lost. Suck it up loser. Dadalawang tamang nagawa ni panot hindi mo pa matanggap.

  • moral_angel

    Malaki rin ang bonus na natanggap nina Purisima, Abad, Henares, Ona at Drilon sa pagpasa ng sin tax. Hindi rin sila namigay ng aginaldo. Kuripot!

  • Guest

    Ayaw ng ipahalata ng LP senators na kumita sila sa sin tax at RH bill
    kaya hindi sila namigay regalo. Bwahahah!

  • Guest

    That’s right. Kumita ang grupong iyan nina Purisima sa Bloomberg
    Foundation at BAT dahil sa sin tax, pero di namahagi sa iba. Kunat n’yo!


  • Kristoffer Atienza

    Prices of Marlboro soft packs have increased today, Friday, December 28, when the law has yet to take effect on Tuesday, January 1, 2013.

To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.

Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:

c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94


editors' picks



latest videos