Brouhaha over death and ‘sin’ taxes

The last time I purchased Pall Mall unfiltered packs was at the Sydney airport sometime before the turn of the millennium. The cigarettes turned out to be stale, so I’ve since kept one unopened pack in my museum display case, alongside old packs of Philip Morris “Browns” and Chesterfield, also unfiltered.

You see, I believe in being one of the last of the big spenders, or you might say the Mohicans, whichever is appropriate. If you’re gonna continue smoking anyway, why be wimpish about it and settle for filters, which don’t really reduce the tar and whatever other supposedly unhealthy substances come with tobacco?

I stand up for my vices, not in any hope of preserving any Iron John image, but simply because a filterless fag tastes better, especially with coffee, as well as at post-prandial and post-coital moments. Besides, being a creature of habit, I subscribe to the life-long principle: If it ain’t broke, why fix it?

I’ve been smoking filterless cigarettes since 1960 (a watershed year, by all global lifestyle accounts). By the grace of the great Mohican gods, I should do no less than adhere to the purity of the habit. One last argument against filters is that one has to take deeper drags. And that’s bad for my baritone, which could fail to hold up at a sing-along derby with fellow writers, or for sultry duets with Cooky Chua.

When the world turned wimpish and the crunch came, as far back as the early-to-mid-’90s, I found a tougher time sourcing my favorite filterless brand. Thus did an anticipatory sense of eureka accompany me on forays abroad, where I was still likely to spot the desiderata on some airport counter, incredibly high-priced as these would be.

But first, a historical background check. I lost the cherry in my throat one fine afternoon while walking up Azcarraga (now Claro M. Recto Avenue) from Mendiola, after school. The first ever stick I drew to my mouth and lit up was Spud, cheap, and cool-ish. It had a faux orangey band at one end that suggested a filter. So even then I was repulsed by the attempt to dumb down a potential nicotine addict (Piscean, therefore easy picking).

I coursed through several brands, but really couldn’t stand Salem, which became trendy as a sophisticate’s choice. The motel on F.B. Harrison, fine. But the cigarette? Any draw was too menthol-ish for me, and occasioned quick hunger pangs. I settled for Chesterfield, helped along by a clever mnemonic device: Come Home Every Saturday To Eat Ripe Fruits In Every Lucky Day. Oh, there was also Lucky Strike, the American and British editions (“It’s toasted!”). And I’d walk a mile for a Camel, until I “call(ed) for Philip Morris!” I also preferred to be “Wherever Particular People Congregate” — for Pall Mall.

Came a time when “blue seal” didn’t come cheap anymore from the Zamboanga barter trade or wherever the imported brands were “ismagold” through, so that a tiered price scheme separated the men from the boys. Thankfully, the local Philip Morris Browns I found of a suitable taste, so that poet-friend Freddie Salanga and I usually kept a pack each in our chest pockets.

But in the 1990s of awful political correctness and unconscionable wimp-hood, the local PM manufacturers stopped producing unfiltered browns. I lamented the demise, loudly in print. The PM managers took pity and actually scoured the archipelago for leftover cartons. I received a freebie couple and was grateful. One carton or ream, of 10 packs, proved serviceable as a long goodbye (about a week). The other was stale, so off the packs went to my budding museum.

I shifted to Pall Mall unfiltered, blue seal, but only smoked five sticks a day, after meals and other delights. It was beyond my budget to consume 1.5 packs a day of “blue seal.” To keep my poison level up while banging away on an old Smith-Corona, and eventually trying out a laptop, I settled for the local Winston Reds, filtered, which I preferred over Marlboro.

Then Pall Mall unfiltered became unavailable. Mercifully, imported (or smuggled) Camels could still be purchased by the carton at Cash ‘n’ Carry. Two cartons sufficed per fortnight, even when the price-per-pack kept soaring from P35 to P40 to P50. On Timog Avenue, too, some roadside vendors would have stray packs, whenever I couldn’t make the drive all the way to Malibay St. in Makati.

This went on for a few years until Camel unfiltered also disappeared from the local market. That’s when I had to bite the bullet and try out the local filtered Camel. I found that if I snipped off the danged filter, why, it almost tasted as if I’d walk a mile for it, or with it. And that practice of circumcision, er, excision, I have indulged in since. If you visit a watering hole and find an ashtray full of filters, Kilroy was there. 

Now it pains me to hear of congressional hearings where sin taxes or excise taxes or death and taxes are debated endlessly, all because the British American Tobacco (Philippines) Inc. introduced a local edition of Pall Mall filters (in fact, four kinds: Filters, Lights, Menthol, and Menthol Lights) to compete against cheap brands. This was done through La Suerte, but unluckily, some head honchos didn’t seem to interpret local laws correctly, and had done this while still selling Pall Mall “blue seal” at Duty Free.

I first saw the nicely packed, in brick red, Pall Mall Filters months ago at Shopwise in Libis, QC. It sold for P12 or P14, I can’t remember, but much cheaper than my Camels at roughly P22 a pack. Nostalgia beckoned, so I tried out the new entry into the cheapo market. Even with the filter excised, it turned out to be a far cry from my favorite Pall Malls of the late ’90s.

But that’s not why I’m weighing in on the current brouhaha involving the Pall Mall Excise Tax Inquiry being conducted by the Ways & Means Committee of our exalted House of Representatives. It appears to me to be a question of “dura lex sed lex” versus “it ain’t cricket,” as what the Brits may be crying.

I caught Ricky Carandang, a favorite nephew, guesting former BIR Commissioner Jose Maria Buñag and BAT’s general manager Jeremy Flint on ANC. As usual, Ricky was sharp and correctly compressed the issue into a simple one. 

A law, RA 8240, came into effect on Jan. 1, 1997, setting up a four-tier cigarette tax classification system. In July 2004, RA 9334 amended this, providing that cigarette products introduced and classified before its enactment are subject to legislative protection from re-classification. These would include Marlboro, Philip Morris, Camel and Mild 7.

Now these Big Four have reason to protest how latecomer Pall Mall can undersell its local editions, when the imported one was taxed much higher. Excise taxes are to follow the whichever-is-higher principle, meaning that whichever rate is higher will be applied uniformly for all products of the same brand.

 The new law also provided that there should be no downward classification for taxing purposes. Thus, imported products are required to be subject to the same excise taxes as those locally produced. 

Now our sagacious solons, led by Deputy Speaker Arnulfo Fuentebella, is asking the Department of Finance (DoF) why it has reversed a ruling by the Bureau of Internal Revenue (BIR) that doesn’t find Pall Mall locals to be exempt from the new law. It’s been pointed out that revenue agencies should always favor the State by collecting the higher tax rate.

In effect, the DoF seems to have overstepped its functions with the recent order of Finance Undersecretary Gaudencio Mendoza, Jr. imposing a lower tax on Pall Mall locals, which would then be paying P6.74 per pack instead of P26.06 as earlier ordered by former BIR Commissioner Buñag.

Mr. Flint appeared frustrated by the law that protects earlier entrants in the cheapo cigarette market. He called for fairness, and a level playing field for investors. But it seems there was inadvertence in retaining the premium Pall Mall in Duty Free stores, something that BAT obviously acknowledged by attempting to pull these out, a little too late.  For his part, Atty Buñag, who was a partner in former Sen. Raul Roco’s law firm before he was chosen to head the BIR, maintained that the power to decide disputed tax assessments is vested exclusively with the BIR Commissioner, since Congress, with its exclusive and original jurisdiction to enact tax laws, only delegated the power to classify new cigarette brands (including Pall Mall) to the BIR.

He added that if La Suerte or British American Tobacco feels aggrieved by the BIR ruling, they should find recourse before the Court of Tax Appeals (CTA) and not the DoF.

Now here is where another, maybe bigger, side issue rears its head. DoF Sec. Margarito Teves had called for Atty. Buñag’s head owing to what he called “BIR inefficiency” during the latter’s tenure. The truth of the matter is that Buñag raised record-breaking revenues, only to find that the arbitrarily imposed collection quotas were unrealistic.

So there seems to be a personality difference at play here, with Atty. Buñag being unfairly roasted by the DoF, which then reverses his final ruling on excise taxes on Pall Mall. But as Sen. Loren Legarda has pointed out, while the Finance honchos are intent on blocking her proposed tax relief for senior citizens, it was all for downward classification of cigarette products. This in turn could lead to revenue losses of some P56 million a year, per BIR Commissioner Lilian Hefti, who testified at the hearing.

What gives here? Is the DoF honestly observing the fairness principle in order to protect and attract more foreign investment? Or is it just showing up a former BIR Commissioner, even at the risk of flouting the law?

The law may seem hard, and only protective of early players in the smoking game, but while it has yet to be amended anew, it seems clear-cut that Atty. Jose Maria Buñag’s ruling was in consonance with legal application of revenue-generating measures.

If you ask me, of course I’d say down with so-called “sin” taxes. Level the playing field all across the board, which means allowing us smokers to “sin” away as long as we’re not affecting militant wimps with so-called passive smoking.

Personally, I’m more concerned with Ateneo de Manila University’s impending reclassification, and relocation, of smokers’ pocket gardens or “Smocklets,” just because some busybodies just hate the sight of us sinners throwing away our pesos up in smoke. But like laws, habits die hard. So live and let live, or die, folks. Excising cigarettes or deporting smokers to the edge of the earth won’t faze a big-spender, especially one who excises fllters.