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Sin tax by Monday? Marcos doubts it

Sen Marcos doubts the Senate will be able to pass the sin tax bill by the Nov 19 target

NOT REALISTIC. Sen Bongbong Marcos says the figures and computations used in the Drilon version of the sin tax bill are not realistic, will harm tobacco farmers and cause a spike in smuggling. Photo by Ayee Macaraig

MANILA, Philippines – Sen Franklin Drilon set a November 19 target to pass the sin tax bill but for Sen Bongbong Marcos, it’s unlikely the debates will wind up by then.

In an interview on Thursday, November 15, Marcos said he and Senate President Juan Ponce Enrile, and Senators Ralph Recto and Panfilo Lacson, still plan to introduce amendments to the measure.

Marcos interpellated Drilon on the bill on Wednesday, November 14.

“It’s possible [we make it] but I am saying that the calculations they used were wrong, I will introduce amendments so I think we will have to discuss that again because we don’t agree,” Marcos said.

“We might not finish by Monday but we will try because the [national] budget is already there …. It’s possible but let’s see.”

Drilon, acting chairperson of the Senate Ways and Means Committee, set the November 19 target to ensure that the Senate has enough time to tackle the national budget. The Senate has been working overtime, holding sessions from 2 pm to 8 pm to take up the sin tax bill.

The senator is also chairperson of the Finance Committee in charge of the budget.

Both the sin tax bill and the budget are priorities of the Aquino administration.

Spike in smuggling

Drilon’s bill aims to raise an additional P40 billion in revenues from tobacco and alcoholic products. The figure is higher than the P15 billion to P20 billion in the version initially proposed by Recto, and closer to the P60 billion target of the executive branch.

Marcos and Recto have said the P40 billion figure in the Drilon version is not realistic. They hail from Ilocos Norte and Batangas, respectively, provinces with tobacco plantations and manufacturing plants.

Marcos reiterated that Drilon’s bill supposedly used wrong computations and assumptions. He again stressed that it will not deter Filipinos from smoking and instead cause a spike in the smuggling of tobacco products.

“On elasticity, they say when you increase the price of cigarettes by a few pesos, consumption will not drastically go down. In our study of the bill, consumption of legal cigarettes significantly goes down and people will resort to the cheapest cigarettes, the smuggled cigarettes,” Marcos said in Filipino.

He said the experience of other countries show that when the excise tax is raised, the desired revenue collection is not reached. Instead, it is the smuggling rate that goes up.

If asked to decide on the current version, Marcos said he will vote against it because of “fundamental differences.”

In the debate Wednesday, Drilon responded to Marcos’ concern, saying that smuggling is not just a function of price but is a law enforcement issue.

‘The goose that lays golden egg’

Marcos said that while he is not against taxing tobacco, the government should not destroy the industry.

“There’s a saying, ‘Don’t kill the goose that lays the golden egg.’ The government already collects a lot of money from the tobacco, alcohol industry. If they drastically change the system, this will destroy their source of revenues.”

The senator reiterated that government must assist farmers and workers that will be displaced by the bill. Drilon though has said that the sin tax bill has enough safety net features amounting to P10 billion.

HEALTH ISSUE. Sen Pia Cayetano poses with anti-tobacco advocates in a press forum. She says the focus in the sin tax bill should be health, not the profits of tobacco companies. Photo by Ayee Macaraig

‘Prevent youth from smoking’

If Marcos does not want to kill the goose laying the golden egg, Sen Pia Cayetano said she does not want to kill the youth. In the Kapihan sa Senado press forum, Cayetano focused on the health aspect of the bill.

She said while she supports Drilon’s bill, she prefers the version of Sen Miriam Defensor Santiago that will raise an additional P60 billion in revenues.

Cayetano asked the Social Weather Stations survey to present results of a poll commissioned by the NGO Health Justice Philippines.

The survey said the average cigarette price that will make smokers aged 13-17 consider smoking is P10 per stick. The survey was conducted in August, with 1,200 respondents aged 13-17.

“My problem with the Drilon bill is cigarettes are still affordable for the youth. I had the figures computed. Currently, the Marlboro light is P1.6 per stick. Under the Drilon version, it’s P2.5 What I want is for it to be beyond reach,” Cayetano said.

Cayetano said the focus should not be on the tobacco industry.

“When you’re looking for a cure for cancer, do you say don’t pursue this angle because the impact on the industry is too big? You don’t right? Smoking is a disease, a social and actual health disease.”

“You don’t hold back in looking for a cure and remedy to address this. – Rappler.com