Third Senate hearing on sin tax bill

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Third Senate hearing on sin tax bill

Senate deliberations on a proposed measure to increase taxes on tobacco and liquor continue.

  • Outside the Senate, tobacco farmers gather to protest the planned increase in the taxes, saying it will affect demand for cigarettes, their livelihood.
  • Enrile: There's no question there should be an increase (in taxes). But how much? If we increase, it's uncertain whether there will be impact on prevention of diseases. For sure, the revenue target of government will have to be considered very carefully.
  • He adds: In my opinion, we will suffer if we impose a very burdensome rate.
  • Drilon, for his part, proposes a "moderate, gradual and not abrupt" increase in the tax rates
  • Former National Treasurer Leonor Briones says it's about time to increase sin taxes. "Collections from cigarette and spirit taxes in other countries are so much higher than those in the Philippines - whether you're comparing Laos, United Kingdom or Germany."
  • Dr. Cid Terosa of the University of Asia and the Pacific says gross sales of tobacco industry stands at P166.7-B in 2010, based on the audited financial statements of 6 cigarette firms.
  • Recto says this is much higher than government data. Data submitted to the committee, he says, place gross sales of the entire "sin" industry - tobacco and alcohol - at P200 billion to P210 billion, accounting for 2% of gross domestic product.
  • Terosa says increase in prices will lead to higher inflation rate. He says a 58% increase in cigarette prices will result in a 0.62 percentage point increase in the inflation rate; a 106% hike will result in 1.12 percentage point increase in inflation.
  • Irene Reyes of non-government organization Health Justice claims the Philippines has the cheapest cigarette prices and the highest number of consumers.
  • Reyes: We need to reform the sin tax. Studies show that increasing cigarette prices will prompt smokers to reduce consumption. The youth and the poor are price sensitive. It will be difficult for them to buy cigarettes when prices increase.
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