Smoking gone?

The Aquino (Part II) administration collected a hefty amount in excise tax last year, the first year of the new “sin tax” on cigarettes and alcohol, with total revenues estimated at about P42 billion—almost double the projected target of P23 billion.

The Department of Finance recently presented the figures to the congressional oversight committee that conducted a review of RA 10351—the new excise tax that the administration endorsed in Congress about a year ago.

Actually, the committee only wanted to find out if the “sin tax” lived up to its promise to reduce the incidence of smoking in this country—the administration sold to Congress the idea that the law was primarily a “health” measure.

In other words, the goal of the law, first and foremost, was to discourage smoking among Filipinos, particularly those in the low-income bracket, by raising the taxes on cigarettes to punitive levels.

Question: How did the “sin tax” do in the health aspect in its first year of implementation?

The boys of our leader Benigno Simeon (aka BS) could not provide the lawmakers even just a simple assessment of the “health,” as they merely parroted the administration’s official line that the reduction in smoking should be a “long-term” goal.

Still, Edgardo Zaragoza, administrator of the National Tobacco Administration, noted that the volume of cigarettes that left the factories of manufacturers last year went down by 16 percent which, to him, was proof that consumption also dropped by 16 percent.

But James Lafferty, general manager of the British American Tobacco, maker of the “Lucky Strike” brand of cigarettes, was quoted in reports as saying that cigarette “consumption was not affected … nothing had happened.”

Who should we believe, the NTA administrator or the cigarette corporate executive?

Hint: Cigarette companies are widely known to cheat on their “sin tax” payments by concealing their ex-factory shipment to the Bureau of Internal Revenue.

The BIR assigned its personnel to the factory sites of cigarette companies to monitor their “removal,” i.e., shipment going out of the factories, and the BIR personnel—no matter how dedicated or, well, incorruptible they are—could not be at the factory sites all the time.

In fact, Finance Secretary Cesar Purisima issued memos to the Bureau of Customs and the BIR to investigate the activities of a little-known cigarette company in Bulacan called Mighty Corp., which mysteriously could afford to sell its cigarettes at a dirt-cheap price of only P1 a stick, or around P16 a pack, despite the increase in the excise taxes for low-priced brands as Mighty’s from P2.72 to P12 a pack.

Anyway, here is a sample of Purisima’s information revealed in the memorandum: “The volume of imported tobacco leaf [of Mighty] for warehousing from the Bureau of Customs does not match the volume of reexports from the BIR, leaving unaccounted tobacco leaf import entries of 6.86 million kilograms in 2011 and 3.52 [million kilograms] in 2012.”

He added: “The excise tax revenue loss from the unaccounted volume amounts to P1.16 billion in 2011 and P598 million in 2012.”

So when the BOC obtained a new commissioner, a DOF straight-shooting technocrat named John Sevilla, the BOC immediately padlocked Mighty’s bonded warehouses because, in effect, Sevilla found Mighty’s smuggling smoking gun in those bonded warehouses.

Now, Purisima issued the memo to the BOC and the BIR more than six months ago. Up until now, only the BOC has acted on it. The BIR still seemed to be uninterested in the Mighty case, for whatever millions of mysterious reasons.

Surveys showed that cigarette consumption remained at 5 billion packs last year, or about 100 billion sticks a year, indicating that smoking has not gone down in this country, despite the punitive tax on cigarettes.

Some cigarette companies must be doing their level best to avoid the high taxes.

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Now regarding another vice popular among Filipinos—the numbers game called “jueteng”—it seems that the Philippine Charity Sweepstakes Office (PCSO) finally stumbled upon a new gaming scheme to fight the jueteng lords.

From what I gathered, the PCSO’s new game called “Bingo Milyonaryo,” which is operated for the PCSO by a company called Comnet Management, already beat the jueteng syndicates in the Cagayan Valley. And the gambling lords there started to resort to their usual tactics to discredit the new PCSO game.

The prize in the Bingo Milyonaryo game can actually reach as high as P4 million on a 5-peso bet, which jueteng and masiao operators can hardly match.

The PCSO moreover hold draws three times a day, with five different ways for the gambler to win in every draw.

But here is the big difference: The new PCSO has gone hi-tech, with the players able to place bets through their cell phones or tablets, which is a system jueteng and masiao operators can hardly apply in their rackets.

According to the PCSO, the gambling syndicates already unleashed a demolition job against Bingo Milyonaryo in Nueva Vizcaya, particularly in the capital city of Bayombong, spreading rumors that the PCSO game was actually just a front for jueteng and other illegal games.

Supposedly, according to the demolition job, bet collectors for the PCSO game were actually using the same mechanics as those used in jueteng, even refusing to issue authorized official receipts to the bettors.

From what I gathered, Bayombong Mayor Ramon T. Cabuatan Jr. already denied the rumors, saying that after he personally monitored the operation of Bingo Milyonaryo in his city, he determined that the operators were following the guidelines issued by PCSO.

Still, according to PCSO chair Margie Juico, the rumors against Bingo Milyonaryo could have arisen some time ago because of weak cell phone signals in certain areas, although the PCSO already remedied that deficiency.