Sin Tax Law

Topics: Tax, President pro tempore of the United States Senate, Taxation in the United States Pages: 4 (1286 words) Published: January 26, 2013
Sin Taxes
House Bill 5727, or the Sin Tax Bill, aims to restructure the existing taxes imposed on alcohol and tobacco goods. Duties on these products are a potential revenue source that will help fund the Universal Health Care Program of the administration. Likewise, higher taxes—and consequently higher costs—are seen as a deterrent to the consumption of “sin” products, whose adverse effects are mostly borne by the poorer segments of society. Why are we supporting it?

1. To promote health by discouraging vice.
2. To collect more revenue for healthcare.
According to the Department of Health (DOH), the Philippines has an estimated 17.3 million tobacco consumers, the most number of smokers in Southeast Asia. Filipinos on average consume 1, 073 cigarette sticks annually, while the smokers in the region consume less than a thousand sticks yearly. This high consumption rate is seen as a result, among others, of the very low cigarette prices in our country.Smoking is responsible for 71 percent of lung cancer deaths in the world. Consequently, lung cancer is the leading form of cancer in the Philippines. DOH statistics reveal that 10 Filipinos die every hour because of smoking.According to the DOH, a 10 percent increase in tobacco taxes will reduce the number of smokers by two million by 2016. A significant decline in the number of smokers will likewise reduce the number of smoking-related deaths. Revenue

The Department of Finance (DOF) has determined the following flaws in the current system of taxing sin products: * The current system is still under the Price Classification Freeze, wherein old brands are taxed differently from new ones. * The system follows a multi-tiered tax structure that is prone to the downshifting of smokers to cheaper cigarette brands (which does not discourage smoking). For example, based on 1994-2010 statistics provided by the Bureau of Internal Revenue (BIR), it was observed that consumers had downshifted from medium-priced...
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