Sin Tax Bill
The Sin Tax Bill
(Senator Miriam Defensor Santiago) The Philippines has scandalously low taxes on two commodities that have been proven killers of individuals, destroyers of families and threats to national economic security: cigarette and spirits. At present, 25 million Filipino youth who are 18 years old are smokers. If they continue to smoke, half of them will die. Santiago is the principal author of Senate Bill No. 3249, “An Act restructuring the excise taxes on alcohol and tobacco products.”The senator compared her bill with that recommended by the committee report, known as S.B.No. 3299, and sponsored by Sen. Ralph Recto, chair of the ways and means committee. “Under the Santiago bill, government will raise P60 billion for the first year. By contrast, the Recto bill will earn only P15 billion. The foregone revenue could go to universal health care, such as more hospitals, rural health units, and barangay health stations. The bill imposes a unitary tax system, as recommended by the World Health Organization. The Recto bill uses a 3-tier tax rate for tobacco and alcohol products, making them cheaper and thereby encouraging their use. Unitary tax system which she used in her bill is more simplified and therefore easier to administer. She contrasted it with the multi-tier system, which she said authorizes tax officials to classify brands according to tiers, a practice which invites corruption and abuses.
The current multi-tiered tax system has made cigarettes so much cheaper in the Philippines than in other countries. A pack of the most popular foreign-brand cigarettes costs on the average Php.27.72 in the Philippines compared to Php.365.2 in Singapore, Php.146.08 in Malaysia, Php.104.84 in Thailand, and Php.64.68 in Indonesia. The reason cigarettes are so cheap in the Philippines is that excise taxes on them have not been indexed to inflation and the classification of the different brands remains what is was in 1996. For instance, Fortune and Champion,
(Senator Miriam Defensor Santiago) The Philippines has scandalously low taxes on two commodities that have been proven killers of individuals, destroyers of families and threats to national economic security: cigarette and spirits. At present, 25 million Filipino youth who are 18 years old are smokers. If they continue to smoke, half of them will die. Santiago is the principal author of Senate Bill No. 3249, “An Act restructuring the excise taxes on alcohol and tobacco products.”The senator compared her bill with that recommended by the committee report, known as S.B.No. 3299, and sponsored by Sen. Ralph Recto, chair of the ways and means committee. “Under the Santiago bill, government will raise P60 billion for the first year. By contrast, the Recto bill will earn only P15 billion. The foregone revenue could go to universal health care, such as more hospitals, rural health units, and barangay health stations. The bill imposes a unitary tax system, as recommended by the World Health Organization. The Recto bill uses a 3-tier tax rate for tobacco and alcohol products, making them cheaper and thereby encouraging their use. Unitary tax system which she used in her bill is more simplified and therefore easier to administer. She contrasted it with the multi-tier system, which she said authorizes tax officials to classify brands according to tiers, a practice which invites corruption and abuses.
The current multi-tiered tax system has made cigarettes so much cheaper in the Philippines than in other countries. A pack of the most popular foreign-brand cigarettes costs on the average Php.27.72 in the Philippines compared to Php.365.2 in Singapore, Php.146.08 in Malaysia, Php.104.84 in Thailand, and Php.64.68 in Indonesia. The reason cigarettes are so cheap in the Philippines is that excise taxes on them have not been indexed to inflation and the classification of the different brands remains what is was in 1996. For instance, Fortune and Champion,