Protect ‘sin’ tax gains, lawmakers urge

Lawmakers yesterday called for vigilance in protecting the gains of the country’s sin tax reform after the Philippine government received recognition from international groups for the landmark legislation.

“There is a need to be extra alert against those who want Republic Act 10351 (Sin Tax Law) amended over its supposed failure to curb smuggling and tax evasion. The law works as evidenced by record collections of sin taxes,” Rep. Rodolfo Albano III, who comes from the tobacco producing 2nd District of Isabela, said.

“By all indications, the Sin Tax Law is a success. Those who call it a failure are those who were badly affected by the reforms,” Albano said, adding that some spurious reports have been coming out recently trying to discredit the government’s remarkable tax collection achievement.

“It is only the monopolies who are against tax reform because it levels the playing field. This is very true in the multibillion-peso tobacco industry. So the government and other industry stakeholders should be vigilant against the anti-sin tax propaganda being foisted by disgruntled parties,” Albano said.

Rep. Emil Ong, of Northern Samar‘s 2nd District, a lawyer-accountant and member of the powerful House ways and means committee, said the Sin Tax Law should not only be protected but should also be further enhanced to reflect the Constitutional mandate to impose more taxes on luxurious items like expensive cigarettes and alcohol.

“Imposing high taxes on high-priced premium cigarettes will not only protect local manufacturers but will also discourage smoking which is hazardous to health,” Ong said.

The World Bank has hailed the Sin Tax law as a “win-win” piece of legislation that not only allows the government to increase its revenues, but also curb the number of deaths from tobacco-related diseases.

Jim Brumby, World Bank Sector Manager for Poverty Reduction and Economic Management, lauded the Philippine government for passing the law, saying it reflects the country’s commitment in the global fight against tobacco.

The World Health Organization (WHO) also praised the Philippine government for its efforts to reduce smoking through the Sin Tax Reform Law. “Tobacco taxes (are) the most effective policy in reducing tobacco consumption,” WHO Director General Dr. Margaret Chan said in a statement.

Last year, the Bureau of Internal Revenue’s total sin tax collection hit P103.3 billion, well above the P85.86-billion target and almost double 2012’s P56.84 billion take. Tobacco products accounted for P70.4 billion of the total collections.

Parañaque 2nd District Rep. Gus Tambunting also said the sin tax reform law has been successful in curbing smoking incidence, especially among the youth.

“Surveys and studies by industry stakeholders have all shown that smoking prevalence has dropped after RA 10351 was passed. These were assumptions made when the law was being debated in Congress, and now these assumptions have proven to be accurate. It is obvious that we made the right decision in passing RA 10351,” Tambunting said.

A survey done by the Social Weather Stations (SWS) commissioned by the Department of Health showed that smoking prevalence in the poorest and youngest sectors dropped substantially.

“Even before the full health benefits of the Sin Tax Law have yet to be reaped…decreases in tobacco and alcohol consumption are already evident,” the group Action for Economic Reforms (AER) said in a statement.

Earlier, the Southeast Asia Tobacco Control Alliance (SEATCA) commended the DOF and Secretary Cesar Purisima for their hard work and technical support in seeing through the sin tax reform law.