Ex-health, finance secretaries stand behind sin tax reform

MANILA, Philippines – Former health and finance officials threw their support behind House Bill 5727, which would replace the complex 4-tiered tax structure for alcohol and tobacco with a simple unitary system.

Thirteen high level public officials from as far back as the first Aquino administration signed the position paper titled, “Manifesto of Support for HB 5727: An Act Restructuring the Excise Tax on Alcohol and Tobacco” highlighting the health and finance benefits of the bill on March 14.

Signatories of the manifesto included:

• former Department of Finance secretaries Margarito Teves, Ernest Leung, Roberto de Ocampo, Jesus Estanislao and Ramon del Rosario
• former Department of Finance undersecretaries Romeo Bernardo and Milwida Guevara
• former Department of Health secretaries Alberto Romualdez, Esperanza Cabral, Jaime Galvez Tan, Juan Flavier and Alfredo Bengzon
• former National Treasurer Leonor Briones

In a statement they said, “The bill is touted as a win-win solution to improve and insure health, save lives, raise the income of the government, and protect the limited resources of the Filipino family by combating the high health and economic costs of low taxation on tobacco and alcohol.”

In its first year, the current bill would generate P60.7 billion in revenues, which according to the policy group Action for Economic Reforms would translate to 5.2 million indigent families with health insurance.

Strong-willed former secretaries   

Teves who was finance chief under Gloria Macapagal-Arroyo said “The president has to have the same passion… like in the impeachment complaint and tell the congressmen, ‘I want this bill approved.’”

The signatories agreed that the bill would “protect health, save lives and raise much needed revenue for tobacco farmers and health services for all.”  

The former secretaries believe the measure will reduce smoking among price-sensitive sectors, such as the youth and poor.

In a statement earlier this week, World Health Organization Regional Director for the Western Pacific, Dr Shin Young-soo pointed out that cigarettes sold in the Philippines are among the cheapest in Asia.  

Recently, Australia introduced legislation setting the cost of a pack of 30 cigarettes at $19.

Whereas according to the WHO’s Dr Shin Young-soo, the most popular brands in the Philippines cost an average of $0.50 a pack.  

By contrast packs of cigarettes average $3 in Malaysia, $6 in Hong Kong and $9 in Singapore.

“Higher cigarette prices would discourage young people from starting and encourage smokers to quit,” Shin said.

Strong opposition

The bill is being opposed by Philip Morris Fortune Tobacco Company, which owns the Marlboro, Philip Morris, Fortune, Hope, Champion and Winston brands.

The company hopes to keep the current system, under which brands that were in the market before 1996 are classified based on their 1996 prices regardless of changes in retail price and inflation.

Earlier their top official, Chris Nelson, said the higher tax rates might increase smuggling, an argument Bureau of Internal Revenue Commissioner Kim Henares disagrees with because of the low cost of Philippine cigarettes compared to those in neighboring countries. – Rappler.com