According to James Sadowsky, author of The Economics of Sin Taxes, taxes imposed on products seen as vices such as alcoholic liquors and tobaccos are called sin tax. Aside from the commodities being objects of disapproval, even their consumers accept such taxes because they seem to hit two birds in one stone. First, they raise revenues and second, they made vices expensive. House Bill 5727 or also known as the Sin Tax Bill aims to reform the imposed tax on the sin products (Official Gazette, 2002). We support this bill for three reasons. First, the government can collect more revenues. Second, it promotes health by dissuading the consumption of the vices. And lastly, the poor sector benefits from it. Sin tax is a form of an excise tax. It is a tax levied on some commodities but not all commodities unlike sales tax. This is how the government generates more revenues (Sadowsky). However, the opposition claims that this bill will backfire on its goals. Since the price of the price of the commodities will rise, the demand will decrease. Thus, there will be no revenues to generate which contrast one of the goals of the bill since industries such as tobacco will die. However, the products under sin tax are vices. Some people are already addicted to them. Even if the price of these products will rise, people will still buy though some price conscious such as the poor sector and students will cut their consumption (Fonbuena qtd. Monsod, 2012 ). Plus, even the demand for the sin products will decrease; the increased tax will make up for the loss demand. Thus, the industries will not die. The opposition also said that the rate of smuggling will worsen. However, according to economist and former Economic Planning Secretary Solita Monsod, there is no connection between the rise of the levied tax and smuggling. Countries such as Japan and Singapore who levied tax the highest on sin products even have the lowest rate of smuggling. Moreover, aside from being a revenue bill, Philippine College of Physicians, New Vois Association of the Philippines (NVAP), and other health advocates claim that the bill is importantly a health bill. According to Emerson Rojas, New Vois President, should the sin tax bill be passed, more adult smokers would be encouraged to quit smoking, and also discourage the start of young smokers. Many people can be prevented from having diseases gained from these vices. Moreover, a big portion of the revenue will go to public health while the smaller will go to affected tobacco workers (Reyes qtd. Drilon, 2012). According to Health Undersecretary Ted Herbosa, money collected from the industry will be used to enroll millions of poor families into socialized healthcare and for the improvement of the whole healthcare service delivery. Thus aside from improving public health, the poor sector will benefit more from the bill. However, the opposition claimed that there is inequality in the bill. The poor are the ones to burden the raised tax. But then according to Solita Monsod, the poor are the ones who are supposed to lessen their expense on these vices since they are the ones who can barely afford to pay medical needs if they acquire diseases from these vices.
Belo, Walden. The Sin tax Promoting the Nation’s Health. Inquirer. May 12, 2012. Web. Fonbuena, Carmela. 5 False Economic Claims on Sin Tax According to Solita Monsod. Rappler. October 18, 2012. Web. Investopedia. Sin Tax. Web.
Official Gazette. Sin Taxes. September 19, 2012. Web.
Reyes, Karl John. Sin Tax Passage to Affect Ph Trade, Finance and Social Services – Drilon. Interaksyon. September 28, 2012. Web. Tan, Kimberly. Liqour, Tobacco Companies reminded of Sin Products Social Impact. Gma News. August 23, 2012. Web The Wages of the sin Taxes. May 15, 2012. Web.
Sin Tax Bill: Both Revenue And Health Measure. Manila Bulletin. October 2012. Web.
A state-sponsored tax that...