Some senators dissatisfied with Recto’s sin tax version

Senator’s proposal eyes P15B revenue way below from DOF’s P60B projection

SOME senators expressed dissatisfaction with the version of the ‘sin’ tax bill that Senate committee on ways and means chairman Sen. Ralph Recto submitted last Wednesday.

“I’m very dissatisfied with that. We’re very disappointed that the committee only came up with P15 billion (projected revenue),” Sen. Serve Osmeña told reporters yesterday.

In his report, Recto said the new tax regime on cigarettes could yield P9.8 to P14.8 billion, while alcohol would contribute P5.2 to P7 billion in additional revenues in the first year or in 2013.

Recto even called his committee recommendation as realistic, reasonable and responsible.

Osmeña, however, said the projected revenue is small as compared to the P60 billion that the Department of Finance (DOF) proposed under the original bill submitted to the House of Representatives.

“The projected tax collection is small. It’s only about 15 percent of the gross domestic product when ideally, it should be 18 to 19 percent. The DOF has already determined that it is possible to collect P60 billion from beer, alcohol beverages and the cigarettes industry,” Osmeña said.

Meanwhile, Sen. Miriam Defensor Santiago called for university students and social media netizens to join the war against the committee version of the sin tax bill, which she calls “the death star bill.”

25M smokers

“At present, 25 million Filipino youth who are 18 years old are smokers. If they continue to smoke, half of them will die,” she said.

Santiago is the principal author of Senate Bill No. 3249, “An Act restructuring the excise taxes on alcohol and tobacco products.”

“I am gobsmacked — speechless with amazement — at the committee report. It bears no recognizable resemblance to my bill. It is an abject surrender to the very rich and very powerful tobacco and alcohol lobby,” she said.

The senator compared her bill with that recommended by the committee report, known as SBN No. 3299, and sponsored by Recto.

P60B for first year

“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,” she said.

“When cigarettes and liquor are cheap, more people will use them. The country already has one of the lowest prices of cigarettes and alcohol in Southeast Asia. That’s why for every hour, 10 Filipinos die from tobacco use. Smoking causes 240 deaths every single day,” she said.

According to Santiago, an international law expert, under a treaty called the “Framework Convention on Tobacco Control,” the tax on tobacco should be 70 percent of the price of the product.

The tobacco treaty aims to reduce the number of smokers from 28 percent to 25 percent by 2014.

Santiago said this is the reason why her bill imposes a tax of P30 per pack of cigarettes by 2015.

“My bill imposes a unitary tax system, as recommended by the World Health Organization. The Recto bill uses a three-tier tax rate for tobacco and alcohol products, making them cheaper and thereby encouraging their use,” she said.

The senator said that the 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.

Santiago said while her bill will save 4.15 million smokers at the first year, the Recto bill will save only 2.93 million smokers.