Duterte urged to veto tobacco tax provision in ratified TRAIN

Health advocates have appealed to President Duterte to veto the provision for a low tax on cigarettes under the Tax Reform for Acceleration and Inclusion (TRAIN) bill, which was ratified by Bicameral Conference Committee last Wednesday.

In separate statements, the New Vois Association of the Philippines (NVAP) and the Action for Economic Reforms (AER) asked to Duterte not to allow the passage of the provision, saying it would amend the Sin Tax Law.

“The R2.50 tobacco tax is an insult to the tobacco tax scheme proposed by the Senate and even the Lower House... the President must junk this cheap change of tobacco tax or else see more victims of cigarette smoking,” noted NVAP President Emer Rojas, a former smoker and a cancer survivor.

“The bill is a TRAIN wreck that will put the health of Filipinos at an even worse state than it is now if the President will not step in decisively,” said AER senior economist Jo-Ann Diosana.

Both groups were referring to the decision of the Bicameral Conference Committee decision to increase the prices of tobacco by 2018 despite the absence of this provision in both the Senate and House versions.

To note, when the TRAIN bill is signed into law, the tax rate would increase to P32.50 for the first six months of 2018 or from January 1 to June 30; to R35 from July 1, 2018 to December 31, 2019; to R37.50 from 2020 to 2021; to R40 by 2022 to 2023; and a four percent annual increase after that.

On the contrary, the proposed bill wants to increase the current tobacco tax rate of P30 pesos per pack to P60 pesos in 2018 and nine percent per year thereafter.

Under the existing Sin Tax Law of 2012, the tobacco tax rate for next year would be R31.20 or increased by four percent every year.

“If passed and signed by the President, this would mean 200,000 more smokers and more victims of tobacco like us,” Rojas warned.

Diosana noted, “The marginal increase in tobacco tax rate will not significantly reduce the number of smokers. Thanks to Rep. Miro Quimbo and Senator Ralph Recto, who come from areas where the two biggest manufacturing plants of Philip Morris Fortune Tobacco are located.”

Lucio Tan’s hand? Senator Joseph Victor “JV’’ Ejercito, chairman of the Senate Health Committee, has accused business magnate Lucio Tan of having a hand in the favorable congressional approval of a very low tax on cigarettes.

“I didn’t see this coming,’’ Ejercito said during a DWIZ radio interview on the version of the House of Representatives on President Duterte’s TRIAN bill which sought a tax imposition of only R5 to R10 per pack during the SenateHouse of Representatives bicameral conference committee deliberation.

Ejercito admitted that he was disappointed by the House panel’s maneuver pressing for a low tax rate for tobacco.

He said he favors a tax of R60 per pack rate.

Boxing icon Sen. Emmanuel D. Pacquiao has filed a bill seeking a quantum increase in the price of cigarettes to P60 per pack.

Ejercito said the hands of Lucio Tan in protecting his tobacco business and of Philip Morris on the bill was evident.

For years, Tan has been fooling the government and now his meddling has been uncovered, he added. “Vested interests came in,’’ he stressed.