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Sin Tax Hearing: September 20, 2012

This is the fourth and last senate hearing on the sin tax bill.

  • Fourth and last Senate hearing on sin tax bill starts.
  • Senate ways and committee chair Ralph Recto presides over the hearing. Here too are Finance Sec Cesar Purisima and Health Sec Enrique Ona
  • Disbursement of revenues under two excise tax laws - RA 7171 and 8240 - now being discussed
  • BIR Comm Kim Henares says RA 7171, RA 8240 did not trickle down to tobacco farmers
  • BIR Comm Kim Henares says RA 7171, RA 8240 did not trickle down to tobacco farmers
  • Recto: Let's harmonize existing excise tax laws
  • Recto summarizes provisions of new sin tax bills - the one passed by House and the others filed at Senate
  • House passed amended bill 5727 by Cavite Rep Jun Abaya w/c seeks to raise P30-B in first yr. Original version of bill sought to raise P60-B
  • Bills passed at Senate carry same provisions as original House bill
  • Recto asks where revenues under ideal P60-B bill will go
  • Purisima: 85% will go to health (Philhealth and DOH). This is roughly P50-B
  • Recto says national budget currently allocates P12.5B for Philhealth. Ona says this covers premium payments of poorest of the poor
  • Recto asks whether Philhealth COO Alex Padilla if agency received allocation under natl budget. Padilla says no, not all.
  • Recto: we'r promising additional revenues under new bill, bt what assurance do we have they will be released?
  • Senators Teofisto Guingona III and Franklin Drilon join hearing
  • Recto asks for additional data from finance officials to be able to release the committee report 'as soon as possible'
  • Economist and UP Prof Winnie Monsod now at hearing
  • UP College of Medicine Prof Antonio Dans presents statistics on the economic burden of smoking-related diseases and deaths
  • Dans says P188-B economic burden an 'underestimate'
  • Dans: When tobacco industry increases their prices, thy become our partners. Govt revenues improve, deaths are reduced
  • Recto asks finance and health depts to also provide data on effect of sin tax bill on alcohol industry
  • Senators listen to Dans' presentation t.co
  • Dans: price of cigarettes to go up 97% in 1st yr under santiago bill (P60B). Smoking prevalence to go down 31% due to inelastic demand.
  • Monsod's turn to speak
  • She will talk about 'lose' arguments presented by sin industry
  • Sin industry should be taxed higher than other industries because it's bad for health - Monsod #SinTax
  • Monsod repeats an earlier presentation she made to refute sin industry's claims vs sin tax #SinTax
  • Monsod's presentation summarized here: t.co
  • On keeping tobacco taxes and prices cheap, Monsod says 'it's not an act of mercy to the poor, but an act of mercy to tobacco industry.
  • Monsod to Recto: When u asked asked why excise taxes on alcohol under House bill is too small, you know why
  • Recto replies: I have an idea... It's political
  • Monsod: Let's take it out in the open. She says NPC had something to do with it. NPC is the political party of businessman Danding Cojuangco
  • Cojuangco is chair and former major shareholder of alcohol beverage maker San Miguel
  • Recto to Monsod: Yes, there is a lot of lobbying here
  • Manos Koukourakis of JTI says increasing taxes will lead to smuggling
  • Recto reads statement of economist Ben Diokno. Diokno backs argument smuggling will increase when taxes on tobacco are raised significantly
  • Carmen Herce of PMFTC tells Henares: our books are open if u want to audit. Herce denies transfer pricing allegatiobs
  • Henares to Herce: don't worry, we will (audit).
  • Senate President Juan Ponce Enrile joins the hearing
  • Recto: I hope when we raise taxes and say we will spend them this way, we'll keep our promise
  • Recto reiterates P12B budget for Philhealth under natl budget not yet released
  • No additional questions from other senators. Hearing adjourned.
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