MANILA, Philippines -- The government should go slow in imposing higher taxes on alcohol and cigarettes as it is inappropriate to impose more taxes during an economic turmoil, the chairman of the House ways and means committee said Tuesday.

"This should be the time to reduce taxes, not for government to take more money from the pockets of taxpayers," Antique Rep. Exequiel Javier said.

The ways and means committee discussed Tuesday several pending bills increasing or restructuring the excise tax rates on alcohol and tobacco products.

But Speaker Prospero Nograles said the adjustment in "sin taxes" was one of the options being considered by government to finance various programs to cushion the adverse effects of the global financial crisis.

"While we are directly helping government cope up with the adverse effects of the global financial crisis, we are also indirectly helping people do away with smoking and drinking. This is good for the economy and the health of the people," Nograles said.

Quezon Rep. Danilo Suarez, one of the proponents of the bill, seeks the imposition of two tax rates in 2009 before the adoption of a single rate in 2010.

The new scheme, he said, could easily generate P75 billion a year.

The Department of Finance (DOF) is supporting Suarez's bill.

"What we would want to see is that revenues are available and these will be channeled to infrastructure and basics services … rather than generating savings," Finance Secretary Margarito Teves said.

Under the proposed scheme, a two-tier excise tax regime will be applied in the first year before a single-rate system is implemented. The expected yield in revenues for the first year is between P19 billion to 22 billion, which will increase to between P30 billion and P40 billion in the second year; between P40 billion and P50 billion in the third year; and between P60 billion and P70 billion in the fourth year.

Finance officials have said that with a uniform rate, tax administration would be easier. A simple tax system helps encourage tax compliance and increases tax collection, DOF said.

RA 9334, also known as the Sin Tax Law of 2005, mandates that the excise tax on cigarettes and alcohol be increased every two years until 2011. Under the current system, excise tax rates on cigarettes and alcohol vary according to price classification -- the higher the classification, the higher the tax rate.

Representatives from San Miguel Corporation and Ginebra San Miguel, which dominate the local beer market with an estimated 93 percent share, said they supported a simplified taxation on sin products.

But local cigarette manufacturer La Suerte Cigar did not favor a single tax rate for cigarettes because it meant subsidizing well-known international brands. The company instead proposed a "dual specific tax rate system" for locally manufactured cigarette brands.