Time running out on ‘sin tax’ bill—Drilon
Senator Franklin Drilon
After deliberations on Wednesday in which only two senators interpellated him on his new substitute “sin tax” bill aiming to generate at least P40 billion in additional revenues from the proposed tax, Sen. Franklin Drilon reminded Senate colleagues that they have only until Nov. 19 to pass the measure.
Senate Majority Leader Vicente Sotto III said most of the senators that have expressed their intention to question Drilon on his bill have asked for more time to study the measure.
“We want to give everybody a chance to raise questions so we can explain this measure. We just hope that we can keep within our deadline of having this approved by the 19th of November so that we can go on the floor on the budget on the 20th of November,” Drilon told Sotto.
Drilon said he was ready to answer the questions of those senators who would wish to interpellate him on the bill.
“[But] if they would not be present for some reason or another, we regret that if we have to meet the deadline then we would have to consider that opportunity as having been waived, in fairness to everyone,” he said.
Sotto said he would try his best to have all the senators ready by Monday.
P46B more
Only Senators Ramon Revilla Jr. and Panfilo Lacson interpellated Drilon Wednesday. Answering Lacson’s questions, Drilon said that if his proposed measure is approved, there would be P46 billion in additional revenues from the sin taxes.
If that was added to the P48 billion in sin taxes collected in 2011, the total collection for the first year would be P94 billion, he said.
Sen. Ralph Recto, the resigned chairman of the Senate ways and means committee, on Wednesday warned that the P40 to P46 billion that Drilon, his replacement, wants could result in job losses in the tobacco and alcohol industries.
Recto was widely criticized for submitting a “weak” committee report on the sin tax bill that only provided for an increase of P15 billion in taxes. He resigned the committee chairmanship as a result.
Recto said he could agree to an increase of P20 billion in sin taxes if the Department of Finance would provide the economic assumptions indicating that the figure was workable.
Target too high
He said the Drilon substitute bill’s target additional revenues was “too high” given that the local tobacco and alcohol industries have a gross annual earning of only P210 billion.
“I agree with the plan to raise taxes to curb consumption of tobacco and alcohol. But if we add P45-billion additional taxes, these industries need to sell P255-billion worth of products. How do you collect that with fewer packs and fewer bottles? So, I see that as a big problem,” Recto said.
The two industries would be forced to lay off workers if their profits can no longer compensate for higher taxes to be paid to government, he said.
This could translate into job losses and a trickle-down effect that would adversely affect even the underground economy, he said.
