MANILA, Philippines–Anti-smoking advocates who championed the enactment of a law increasing taxes on so-called ‘sin products’ have joined the growing clamor for a congressional probe of cigarette maker Mighty Corporation over alleged tax malpractices.
The Framework Convention on Tobacco Control Alliance Philippines (FCAP), New Vois Association of the Philippines (NVAP) and Philippine College of Physicians (PCP) said there is a need for an investigation on how tobacco companies, particularly Mighty Corp., are adhering to Republic Act 10351 or the Sin Tax Law to ensure that the law, that took almost a decade to pass, would not become inutile.
“There should be a congressional probe of sin tax malpractices and illicit trade (not just of Mighty) but of all tobacco companies,” said FCAP Executive Director Dr. Maricar Limpin.
She said it is a dangerous precedent to allow violations of existing (tax) laws as it invalidates the purpose of the measure. She explained that failure to comply with the sin tax law means that cigarettes would remain affordable to children and the poor.
Bulacan-based cigarette firm Mighty Corp. has been receiving flak for selling its products at economically unsustainable prices – even below the cost of production, excise tax and VAT. Thus, cigarettes priced at P1 per stick continue to flood the market, defeating the spirit of the law.
“They get to undermine the law and thus prevent us from achieving the two main objectives of sin tax: health and revenues,” Limpin stressed. She added that not having proper sin tax collection deprives government of true revenues that can help finance the country’s healthcare system.
“An assessment of the sin tax law is necessary. And that is stated in the law, that the sin tax law must be assessed again before 2017 or the final year of implementation,” said NVAP President Emer Rojas.
PCP President Dr. Tony Leachon also welcomed the sin tax review, especially to assess its health and revenue impact. “But a review has just been done and it will be redundant to have another review this soon,” he said.
RA 10351 is one of the major health and revenue measures passed by the Aquino administration with the aim of increasing cigarette prices and alcoholic drinks, thereby making them unaffordable for the youth and the poor.
Under the law, 85 percent of sin tax revenues is earmarked for the enrollment of the poorest of the poor to the Philippine Health Insurance Corporation (PhilHealth).
Earlier, the Department of Health and lawmakers led by House Speaker Feliciano Belmonte, Jr. and Senators Antonio Trillanes IV and Juan Edgardo Angara called for a congressional inquiry against Mighty Corp. and as to why the Bureau of Internal Revenue (BIR) has not lifted a finger on its alleged fraudulent practices to evade hundreds of millions, if not billions of pesos, in tax and duty payments.