Lawmaker urges colleagues to tax vices, not needs

A veteran lawmaker has urged his colleagues at the House of Representatives to explore increasing the tax on other ‘sin’ products following the approval of House Bill (HB) No. 4144 that further raises the taxes on cigarettes and a similar proposal on liquor products.

Oriental Mindoro 2nd District Rep. Reynaldo V. Umali cited Rep. Jericho Nograles’ proposal to further increase the value-added tax (VAT) on alcohol instead of imposing higher excise taxes on diesel and other fuel products.

Lawmakers object to the imposition of a higher excise tax on petroleum, removal of the VAT exemptions for senior citizens and persons with disabilities, and ad valorem tax on automobiles which is being strongly pushed by the Department of Finance.

Umali said that lawmakers were doing their best to address the foregone government revenues in line with the current administration’s bid to lower personal income tax to ease the overburdened Filipino working class and the best way to do so is to tax vices.

“Increasing taxes on necessities like petroleum will have massive inflationary effects that will negate the [Duterte] administration’s social reform agenda of easing the ordinary Filipino’s financial burdens,” according to Umali.

He said the approval of HB 4144 was already a step in the right direction.

HB 4144 seeks to amend Section 145 (c) of Republic Act No. 10351 by imposing a two-tier tax system that further increases the tax on tobacco products than in the original version of the law.

Under a two-tier tax system, a P32 tax per pack will be imposed on tobacco products priced lower than P11.50 (nonpremium), and a P36 tax per pack for products priced more than P11.50 (premium).

In his first State of the Nation Address in July, President Duterte strongly asserted his administration’s plan to pursue tax reforms towards a simpler and more equitable tax system.