Santiago: Too late to fight sin tax bill

Senator Miriam Defensor-Santiago INQUIRER FILE PHOTO

All your complaints against higher taxes on cigarettes are for naught, a senator known for her bluntness said Monday.

Sen. Miriam Defensor-Santiago  warned  the Philippines would be violating a commitment made in 2005 as a signatory to the Framework Convention on Tobacco Control (FCTC) if it fails to raise the so-called sin taxes on cigarettes.

Santiago pointed out  the FCTC  specifically requires all signatories to raise sin taxes on tobacco products and reduce the prevalence of smoking.

According to Santiago, the Philippines also risks being branded a “rogue state” if it does not comply with the FCTC obligation.

Santiago said all the noise being made by local tobacco companies against higher sin taxes was unnecessary at this point.

“It is too late for industry leaders to raise their objections now.  They should have raised their objections in 2005 when the Philippines was about to ratify the FCTC,” she said.

Santiago was apparently reacting to a threat made by the president of the PhilTobacco Growers Association that its members would campaign against six reelectionist senators who would vote in favor of higher sin taxes on tobacco products.

In her interpellation during the Senate discussion on the sin taxes yesterday, Santiago said the FCTC had already “morphed into international law” since the Senate ratified it in 2005. Santiago was the one who sponsored the FCTC on the floor at the time.

Up to P45B in revenue

The FCTC was the first treaty negotiated by the Philippines under the World Trade Organization in response to the global tobacco epidemic in the last decade.

“I challenge every single member of this chamber to read the FCTC because that is international law. It binds our Philippine government,” Santiago said.

The Senate intends to raise sin taxes from both tobacco and alcohol products to generate P40 billion to P45 billion in revenue next year.

The senators have agreed to extend session hours from 2 p.m. to 8 pm. from Monday to Wednesday this week to accommodate all those who may want to engage acting Senate ways and means committee chairman Franklin Drilon in a debate over the proposed taxes.

Outside the Senate building Monday, members of the National Federation of Labor Unions  (Naflu) reiterated warnings of possible massive unemployment in the tobacco industry should Congress  pass the sin tax bill.

Naflu president Hilario Punzalan said his group still supported the sin tax report initially filed by resigned Senate ways and means chair Ralph Recto that only imposes a “moderate” increase in taxes on tobacco products.

“But the best solution is to temper tax increases so that workers will get to keep their jobs. We are not against a tax hike, but we want it to be moderate and reasonable enough so that employees in the tobacco and alcohol industries would not have to join the growing ranks of the unemployed,” Punzalan said.

The FCTC’s objective in  raising sin taxes on tobacco products is to eventually decrease government spending on healthcare costs from tobacco-related diseases.