Senate President Juan Ponce Enrile
MANILA, Philippines—Are smuggled cigarettes flooding the Philippine market in anticipation of the sharp increase in tobacco and alcohol taxes?
Senate President Juan Ponce Enrile thinks so after he was handed Thursday morning a pack of China-made cigarettes by a friend who had bought it for P20 in Divisoria.
Enrile brandished the pack of “Yunyan” at the Kapihan sa Senado media forum where he was the guest.
“These cigarettes smell real good. They might just get me to start smoking again,” Enrile joked.
Turning serious, the senate president said that even if a unitary tax of P26 were imposed on that brand under the Senate version of the so-called sin tax bill, a pack of Yunyan would still cost only P46—much lower than lowest-priced local cigarette brands.
Enrile and the other senators who were initially against raising sin taxes warned that the measure, once it became law, could trigger cigarette smuggling to meet local demand.
Acting Senate ways and means chairman Franklin Drilon, however, dismissed his colleagues’ concern, saying that smuggling was an issue of law enforcement, not of taxation.
But Enrile countered that the pack of Yunyan indicated that the scenario he and Senators Ralph Recto and Ferdinand Marcos Jr. had feared was already happening.
Enrile said he had information cigarette smuggling was now rampant in Mindanao.
“But smokers don’t have to go that far. Why, Yunyan is already in Manila,” he noted.
Enrile chided Finance Secretary Cesar Purisima and Revenue Commissioner Kim Henares over the Yunyan cigarettes.
“If you guys do not know of any local manufacturer that makes this,” he said, holding up the maroon cigarette pack before television cameras, “then where did this come from? Did it swim, or is there a secret manufacturer that Kim Henares does not know of?”
“How did this pack of cigarettes get past customs inspectors in Aduana (in the Port Area)? Who let these in? Who are the smart guys or smart girls with connections,” Enrile said.
“Secretary Purisima, Commissioner Kim Henares, why is there Yunyan in the Philippines?” he pressed.
He reiterated his position that higher sin taxes would trigger smuggling, which in turn would hurt local cigarette manufactu-rers and tobacco industry workers.
Enrile, Recto and Marcos, however, still voted in favor of the sin tax bill.
This after the Senate President was assured the burden-sharing ratio of 60-40 between tobacco and alcohol manufacturers would be observed in its implementation. This means that 60 percent of the new taxes would come from tobacco products while 40 percent would come from alcoholic beverages.
The Senate and the House of Representatives have scheduled a bicameral conference to reconcile their respective versions of the sin tax bill on December 5.