Sin tax hearing: smoker puffs 1,074 cigarettes a year

Rappler.com

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MANILA, Philippines – At the Senate hearing on a reform bill on sin taxes on Thursday, August 16, members of the Aquino Cabinet faced grilling by lawmakers who have to decide whether the controversial bill will be passed or not.

The Senate is conducting hearings on the Palace-backed House Bill 5727 over a month since their counterparts at the House of Representatives passed this piece of legislation that rests at the heart of industries where politics and economics traditionally intersect: sin taxes.

Here are some highlights of the hearing:

Finance Secretary Cesar Purisima:

  • At its current version, sin tax bill will provide incremental revenues of P31.35 billion in its first year of implementation in 2013 and P41.51 billion by 2016.
  • The Philippines has one of the lowest excise tax rates in the world. Our current excise tax system has prejudice [or characteristics] such as price freeze and non indexation of cigarettes to inflation, which makes cigarettes affordable. Existing multi-tiered structure allows [cigarettes] to be more accessible to the poor and the young. Cigarettes kill whether they cost P2 or P22.
  • Foregone revenue from excise taxes on sin products from 2006 to 2010 was P19.5 billion. 
  • On Sen Ralph Recto’s concern on whether the proposed bill favors imported brands: We are leveling the playing field. In the Lower House [version] there will be 3 tiers but it will no longer be unitary on distilled spirits. We are proposing a 2-year transition period before unifying the rates for cigarettes and distilled spirits. Today we have 4.
  • On whether HB5727 was watered down: I like higher numbers. The original bill would be the preferable bill (P60 billion additional revenues in first year). We stand by our original proposal but we also recognize that we cannot have our way, we are open to discussions. We will support the result of the process.
     

Health Secretary Enrique Ona:

  • There are 17.3 million smokers in the country. A smoker smokes 1,074 cigarettes a year.
  • Life expectancy of non-smokers may increase 10 to 20 years. The number of deaths to be averted is 400,000 deaths in 10 years. –Rappler.com

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