The Manila Times

Farmers, stakeholde­rs oppose tobacco sin tax

- BY JAMES KONSTANTIN GALVEZ

LOCAL tobacco farmers and stakeholde­rs expressed strong opposition to the proposed bill that seeks a huge increase in the tobacco sin tax.

In a statement, the PhilToand we don’t even know what bacco Growers Associatio­n and the impact of that will be,” said Philippine Aromatic Tobacco Saturnino Distor, PTGA leader. Developmen­t Associatio­n said “Tobacco farmers are struggling that House Bill 4144, authored with falls in demand for tobacco by ABS Partylist Representa­tive because of the huge 340 percent Eugene Michael de Vera, would excise tax increases introduced in introduce two increased tax 2013, with annual compound intiers, one at P32 per pack and creases of 20 percent or more ever the other at P36 per pack. since worsening the situation,”

The proposed bill also seeks an Distor added. “Why is it that only annual increase of 5 percent on tobacco being targeted and not these rates. other excisable goods?

The current Sin Tax on to bacco ( R. A. 10351) sets a unitary excise taxes contribute­d around rate of P30 per pack in 2017, P100 billion in 2015, up from with an annual 4 percent adjustP32 billion in 2012, and are now ment thereafter. constitute more than two-thirds of

“Why are they proposing to the Sin Tax take. hit tobacco again, even before “We are giving more than our another big 20 percent excise fair share of the contributi­on,” tax increase in January next year, Distor said.

“This Bill is being rammed through Congress and we have never been asked for our opinion. The whole process is a sham and we call on the House leadership to seek proper consultati­on and a complete impact assessment before proceeding with it,” he added.

The Ways and Means Committee is scheduling another hearing on the measure on Monday, December 5 a week after its first hearing on November 28.

Earlier, the Action for Economic Reforms (AER) said HB 4144 aims to prevent the tobacco tax from be products, in the guise of protecting the welfare of tobacco farmers.

“HB 4144 runs contrary to the spirit of the Sin Tax Law. A unitary tax system is designed to optimize revenue collection and to ease tax administra­tion,” said Filomeno Sta. Ana 3rd, AER coordinato­r and Madeiline Joy Aloria, AER researcher.

AER said that the lower tax HB 4144 proposes is P32 per pack for cigarettes that have a net retail price (defined as the price that excludes the excise tax and the value-added tax) of P11.50. The higher tax is at P36 per pack for cigarettes that have a net retail price above P11.50.

“It is plain common sense to conclude that government will be earning more revenue from a single rate of P36 regardless of the price of cigarettes,” AER said.

“It must be stressed neverthele­ss that the rate increase that HB 4144 is proposing is ridiculous­ly low, taking into considerat­ion the question of affordabil­ity, spe to replace the rate of P30 must be rejected,” they said.

“In terms of simplicity, the unitary tax, to quote the World Bank (2016), addresses administra­tive by declared value and focus more on observed volumes. Having different rates makes the system more vulnerable to tax evasion and corruption,” AER added.

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