Palace cool to higher sin taxes

MANILA, Philippines - Malacañang is not supporting the proposal for higher taxes on cigarettes, liquor, and other tobacco and alcohol products, Ilocos Sur Rep. Eric Singson Jr. said yesterday.

Singson, a vice chairman of the House ways and means committee, said he inquired from the Office of the President and the office of Executive Secretary Paquito Ochoa Jr. if they have endorsed the proposal contained in Bill 5727. He said he was told that the Palace has not endorsed the bill or any other measure seeking higher taxes on the so-called “sin” products. “This is not surprising since during the presidential election campaign and in the early days of his administration, President Aquino has vowed not to impose new taxes,” he said.              Cavite Rep. Joseph Emilio Abaya, who belongs to the ruling Liberal Party (LP), is the principal author of Bill 5727, which seeks to update the 1996 sin tax structure by substantially increasing rates.

Abaya’s LP colleagues Representatives Erin Tañada of Quezon and Henedina Abad of Batanes have filed similar measures. Ranged against the three bills is Singson’s proposal, which seeks to keep to the old tax structure and effect minimal increases.

The ways and means committee chaired by Davao City Rep. Isidro Ungab is rushing hearings on sin tax bills so it could endorse a consolidated version before the second regular session of Congress ends in June. Ungab, another ruling party member, has indicated that he would support an adjustment in rates.

Singson warned his colleagues that the Abaya bill would increase present tax rates substantially, which could price local products out of the market and eventually result in the death of the local tobacco and alcohol industries.

He said under the proposal, some cigarette products would be slapped a tax of P30 per pack from P12 per pack, those with a present tax of P7.56 per pack would have a new tax of P46 per pack, and those in the lowest tier that have a P2.72 tax per pack would have a rate of P30 per pack.

He said since the Abaya measure is intended to be both a revenue and a health measure intended to discourage smoking and drinking among Filipinos, there are other ways of raising revenues.

“Why always tobacco and liquor (when there is a need to raise money)? Did the proponents of the bill even consider the livelihood of three to four million tobacco farmers, factory workers and their families? Why not raise taxes from vehicles, which are a big contributor to pollution and health problems?” he asked.

During yesterday’s hearing, former health secretaries Esperanza Cabral and Alberto Romualdez shared Health Secretary Enrique Ona’s support for the Abaya bill. They said higher cigarette taxes would surely discourage people from smoking.

On the other hand, Rep. Teodorico Haresco of the party-list group Ang Kasangga joined LP congressmen in pushing for the enactment of Abaya’s Bill 5727.

He said Abaya is advocating a simple tax structure that would benefit both local and foreign companies importing, producing and selling tobacco and alcohol products. “There is an urgent need to shift to a much simpler tax structure that adopts a unitary rate that promotes parity in these industries, while assuring government of its needed revenues to support vital socio-economic programs for the people,” he said.