Lawmakers back higher taxes on 'sin' products

Congressmen are eyeing higher soft drinks and “sin” taxes to boost government revenues, promote healthy consumption and discourage vice.

Palawan Rep. Abraham Mitra has filed House Bill 5034, which seeks to classify soft drinks and other carbonated beverages as non-essential goods and therefore subject to a 20-percent excise tax.

Mitra said studies have shown that “regular drinking of soft drinks increases the risk of acquiring health problems such as blood sugar disorders, bone fractures and heart ailments.”

He said increasing the tax on these products would discourage their consumption, promote better health and raise additional revenues.

He said the government should generate more taxes from all possible sources to shield the nation and its economy from the global financial meltdown.

Another congressman, Quezon Rep. Danilo Suarez, is proposing a 10-percent tax on flavored or colored syrups used in producing soft drinks.

For his part, Iloilo Rep. Niel Tupas Jr. urged the House leadership to expedite the approval of bills increasing taxes on so-called “sin” products like cigarettes and liquor.

“The current financial crisis poses graver threats on the poor, vulnerable people, and we need every available opportunity to increase government revenues. Sin taxes can effectively fill the gaps in government resources,” Tupas said.

“Passing tobacco control measures is the most practicable action that the House can do to gain additional government resources while at the same time help save taxpayers’ money that is spent on tobacco-related diseases,” he said.

He said the Philippines has the lowest tax on cigarettes among members of the Association of Southeast Asian Nations.

He added that increasing the rates of sin taxes would save the government billions in health spending for smoking and drinking-related problems.

“Our government will also be able to generate more taxes that can pump-prime our economy,” he stressed. Manila Rep. Bienvenido Abante Jr. has filed a bill that seeks to raise sin tax rates by more than 200 percent.

The Department of Finance has its own proposal for a sin tax adjustment.

In a recent meeting with Speaker Prospero Nograles, Finance Secretary Margarito Teves said higher six taxes could shield the economy from the crippling efforts of the global financial crisis.

He said cigarette taxes have not been adjusted since five years ago despite the fact that retail prices have gone up several times.

Teves pleaded for expeditious congressional action on his department’s proposal.

Despite his plea, the House ways and means committee has not taken up any of the proposals for higher cigarette, liquor and soft drinks taxes.