Two-tier excise tax system is constitutionally mandated, says Crisologo

The recently passed amendment to the Sin Tax Reform Law to revert to the equitable two-tier excise system is mandated by the Constitution,  according to a veteran lawmaker.

Quezon City 1st District Rep. Vincent “Bingbong” Crisologo said House Bill (HB) No. 4144 was in accordance with the 1987 Constitution, specifically Article VI, Section 28 that requires Congress to evolve a progressive system of taxation.

“Any product must be taxed according to classification. If the product is classified premium, it must be meted with a higher tax and if a product is nonpremium, it must be taxed lower. That’s based on fundamental law,” Crisologo said.

HB 4144, authored by  ABS party-list Rep. Eugene de Vera, proposes a two-tier tax system where cigarette packs priced below P11.50 will be taxed P32 per pack and those priced above P11.50 will be taxed P36 plus a 5 percent annual price hike.

The current law only imposes a unitary tax of P30 regardless of the  retail price and a 4 percent annual increase.

Crisologo attributed the bill’s swift passage in a bid to balance multiple issues particularly in health, government revenues and the plight of lowly tobacco farmers.