Senate showdown on sin tax bill looms
Senators with varying positions on how much sin taxes should be raised appear headed for a showdown as the Senate begins debates on the controversial measure this afternoon.
In one corner rests Franklin Drilon, acting chair of the Senate ways and means committee, who is set to overhaul the committee report sponsored by resigned panel head Ralph Recto and work on raising sin taxes from tobacco and liquor to “at least” P24 billion.
In another is Recto, who said he was prepared to question all figures and data that Drilon and other senators favoring higher sin taxes would propose during the debates.
Then there’s Sen. Miriam Defensor-Santiago, whose bill seeks to generate P60 billion in additional revenue from tobacco and liquor products.
Recto was widely criticized for submitting a report that proposed incremental increases of between P15 billion and P19 billion in sin taxes over a period of several years.
The House of Representatives has passed its own version of the sin tax measure, which slashed in half the P60-billion original target revenue from sin taxes.
More realistic
Recto, however, insisted that his numbers were “more realistic and responsible” because jacking up the taxes on sin products to what he perceived to be unreasonable levels would cause the collapse of the affected industries and result in job losses and subsequently lower tax collections.
The senator remained wary of the Department of Finance’s (DOF) revised endorsement of P40 billion in additional sin taxes, down from its original proposal of an additional P60-billion collection from tobacco and liquor.
Recto resigned as chair of the ways and means committee three weeks ago after complaining that the DOF, Department of Health (DOH) and Bureau of Internal Revenue (BIR) refused to support his committee report.
The senator said he had requested that his signature be removed from the committee report that Drilon planned to use during plenary debates.
“All the studies and efforts I made when I put the report together would go to waste if I do not defend my (original) position (although I admit) that my report has its flaws. That’s why I am prepared to submit my own amendments,” Recto said in an interview.
Not an ‘obstacle’
Recto said he would not be an “obstacle” to the Senate debates on the sin tax measure.
Some observers questioned the plan of Drilon to use the committee report submitted by Recto since the former favored the DOF’s endorsement of higher sin taxes and, reportedly, the sin tax bill filed by Santiago that targets P60 billion in additional revenue from tobacco and liquor products.
Drilon said he would use the committee report filed by Recto under the following premises:
The need to increase the taxes.
The sin tax bill is a health measure “more than a finance or tax measure” because it declares that smoking is a major cause of mortality in the country.
Excise tax is an effective tool in reducing smoking in the country.
DOH, PhilHealth funding
In a separate talk with reporters, Drilon said the Senate needed to approve a sin tax version that would raise the collection by a minimum of P24 billion because the 2013 budget of the DOH and the PhilHealth program for indigents was only P54 billion.
Drilon said the health sector would actually need P77.5 billion next year so it could go ahead with its plan to enroll additional members from 5.2 million of the poorest Filipino families in the PhilHealth program.
Farmers’ safety net
Drilon said the minimum P24 billion did not yet include the 15-percent increment in the budget allocation for safety net to protect workers in the tobacco industry as provided by law.
“We need more revenue for our health sector. The health sector budget is P54 billion under the 2013 budget. It really needs about P77.5 billion and therefore, there is a funding gap of P23 billion to P24 billion,” Drilon said.
“That is why we have to pass the sin tax bill in order that we can fill the financial gap of this sector. We intend to pass the sin tax bill before the 2013 budget,” he added.
Drilon said approving a sin tax bill in which the collection was lower than P24 billion would hinder the enrollment of more poor Filipinos in PhilHealth.
Get act together
Malacañang wanted the Senate to get its act together and pass the sin tax bill.
“There is a budget gap that we need to fill. And we’re hoping that the revenue to be generated by the sin tax measure will be able to fill that gap,” deputy presidential spokesperson Abigail Valte said on Monday.
She said the executive department had no Plan B should Congress fail to pass the revenue measure. “At this point, we’re not looking at other contingencies yet,” she said.
Warning of consequences, Valte said that some of the medical facilities may not be able to get the much-needed upgrade or repair without an assured revenue source. This could also affect funding for PhilHealth premiums, she said.
PhilHealth now gives 100-percent coverage for indigents and treatment for various stages of cancer falling under “Case Type Z benefits,” which are as follows: Standard risk acute lymphocyte (lymphoblastic), leukemia (all cases) in children, early stage breast cancer, low to intermediate prostate cancer and end stage renal disease requiring kidney transplant (low risk).
Recto belied reports that the additional revenue from higher sin taxes had been factored in the 2013 national budget. Recto said he learned this during a joint hearing of several Senate committees on Monday morning.
Recto said the imposition of excise or uniform taxes on both local and foreign products would be disadvantageous to domestic business.
“I have already studied these issues. That’s why I have to defend these facts on the floor,” Recto said.
Tobacco farmers’ rally
As the debates on the sin tax measure heated up, more than 500 tobacco farmers from four northern Luzon provinces picketed in front of the Senate building in Pasay City on Monday morning.
Carrying banners with the message “Local tobacco industry will die,” the farmers from Ilocos Norte, Ilocos Sur, Abra and La Union hoped to hold dialogues with some senators whom they believed could help them in proposing a lower sin tax increase.
Ernesto Calindas, chair of the National Federation of Tobacco Farmers’ Associations and Cooperatives Inc. said that his group had already met with Senate President Juan Ponce Enrile and that the senator had agreed to help them.
Calindas said the farmers would put up tents and stay on Senate grounds until their issues were given resolution.
