Business groups back no changes to sin tax law

THE Philippine Business Group and Joint Foreign Chambers, a coalition of local and foreign business groups, are supporting the Finance department’s position to allow the sin tax reforms to run their course.

In a statement, the coalition said it wants RA 10351 or the Sin Tax Reform Law to be fully implemented, laying down their opposition against the move to prevent the unification of excise tax rates next year.

The House of Representatives approved on third reading House Bill No. 4144, which aims to amend Section 145 ( c) of the National Internal Revenue Code.

Under the proposed measure, a pack of cigarettes with a net retail price (excluding the excise tax and the valueadded tax) of P11.50 will be taxed at a rate of P32.00, while a pack with a net retail price of more than P11.50 will be taxed P36.00.

“The proponents of this legislative measure claim that their intent is to protect the welfare of the local tobacco farmers. However, the lack of proper consultation with stakeholders, including the local tobacco farmers themselves, and the absence of an impact assessment study validating the need for such amendments leave much room for concern and doubt,” the statement read.

“We, therefore, call on our lawmakers to allow the Sin Tax Law to run its course.”

“We believe that RA 10351 was carefully and properly designed to meet the desired national targets and has undergone proper consultations and thorough deliberations with key stakeholders. It is a good and sufficient law that would lead the government to attain its health and revenue goals.”

The Sin Tax Reform Law of 2012, which took effect in 2013, provides that for 2017, packs of cigarettes, regardless of net retail price, will be taxed at a uniform rate of P30.00.

The coalition emphasized that they are also supporting Section 11 of the said act, which authorizes the Congressional Oversight Committee to review the impact of the tax rates beginning the third quarter of 2016.

The Department of Finance said that HB 4144, which is gaining momentum in Congress, would defeat the purpose of sin tax, since it would only drive consumers into buying cigarettes in the lower price tiers.

The Senate will hold its own deliberations on the bill. The House Ways and Means Chairman, Quirino Rep. Dakila Carlo E. Cua, said earlier that until the Senate acts on the measure, the singletax system will remain in effect. —