Palace seeks swift passage of sin tax

A vendor sells cigarettes at a supermarket in Quezon City in this file photo. A proposed bill restructuring the excise tax on tobacco and alcohol products is seen to generate some P60 billion, according to President Benigno Aquino III, who is pushing for the passing of the sin tax reform bill. AFP PHOTO/JAY DIRECTO

MANILA, Philippines—Malacañang wants the sin tax reform bill passed this year so that its enactment would not be tainted by politics connected with next year’s midterm elections.

“We want it passed this year so that it will be devoid of politics,” presidential spokesman Edwin Lacierda told a news briefing in the Palace Monday.

Revenue to be generated by the sin tax would go to the government’s health program, Lacierda said.

He also sought to ease fears that the bill would adversely affect the income of tobacco farmers.

“We need to explain the benefits of the sin tax not only to the congressmen [but also to] their constituents, the tobacco manufacturers’ farmers,” Lacierda said.

“It is in fact beneficial to them if we allow the sin tax reform to push through,” he said. “Competition will redound to greater demand for tobacco.”

And with revenues from sin taxes funding health programs, even constituencies not involved in tobacco production would reap benefits, Lacierda said.

This means the bill would be politically beneficial even to politicians from districts that do not grow tobacco because the revenues would benefit their constituents as well.

Lacierda said the administration was presenting lawmakers from tobacco-producing districts with computations indicating how much their tax revenue would increase if the bill is passed.

House Bill No. 5727 was one of the priority measures that Malacañang submitted to Congress last year through the Legislative-Executive Development and Advisory Council.

The bill would replace the current four-tier tax system for cigarettes and alcoholic drinks with a unitary system that critics say favors expensive, imported brands over more affordable local brands.—Norman Bordadora