Bicam approval of sin tax measure hailed

MANILA, Philippines - Sin tax measure advocates hailed the results of the bicameral conference committee meeting on the sin tax measure a victory even if the revenues to be raised fell short of expectations.

The Department of Finance (DOF) said the government got some of the reforms it was pushing for.

Finance Assistant Secretary Ma. Teresa Habitan said that bicameral’s version which would yield P34 billion in incremental revenues in the first year of implementation is near the P40 billion the government had targeted from sin tax revenues.

“We’re near the end and we were able to check off some of the reforms we wanted put in the excise tax structure,” Habitan said.

For instance, she said the bicameral committee version agreed to the shift of the sin tax system to a unitary rate, the automatic indexation to inflation and it also complied with agreements under the World Trade Organization that would effectively discourage uncompetitive behavior.

The non-government Action for Economic Reforms, a staunch advocate of sin tax reforms said the bicameral version is a victory for the health sector even if the revenues fell short of expectations.

“It’s a big victory,” said AER coordinator Filomeno Sta. Ana III.

He said that while the incremental revenue of close to P35 billion is short of the target, the measure is responsive to health concerns.

A Senate-House conference committee finalized on Monday night the higher rates of taxes on alcohol and tobacco products and the revenue target from sin tax bill.

Sen. Franklin Drilon, who led the Senate conference as acting ways and means committee chairman, said the measure aims to generate an additional P248.5 billion over five years up to 2017, with tobacco bearing the bigger tax burden.

He said the tax burden sharing between tobacco and alcohol would be 70-30 percent for 2013 and 2014, going down to 66-34 percent in 2015, 65-35 in 2016 and 64-36 in 2017.

“Everything has been agreed upon except the earmarking (programs where the funds will be appropriated),” he said. – With Jess Diaz