Enrile sees rough sailing for sin tax bill in Senate

Senate President Juan Ponce Enrile. INQUIRER FILE PHOTO

MANILA, Philippines—The sin tax bill passed by the House of Representatives will have anything but smooth sailing in the Senate.

Senate President Juan Ponce Enrile predicted “bloody” deliberations among senators on the key measure seeking to generate additional revenues for the government. The House version passed earlier this month is envisioned to raise P33 billion annually.

Sen. Ralph Recto, chairman of the committee on ways and means, said he would come up with a “more realistic” version, pointing out that the current tax measure would burden consumers, not manufacturers of tobacco and liquor products.

“I think it would be bloody (‘madugo’),” Enrile said in an interview with dwIZ in reference to the upcoming deliberations. “There has to be equitable taxation, not arbitrary.”

“The way they have crafted it, I’m now telling them, we will ask many questions and I think they will be hard to answer,” he added, referring to House Bill No. 5727.

Senators Miriam Defensor-Santiago and Panfilo Lacson have authored their respective versions of the sin tax bill. Both bills are still pending at the committee level.

Recto said the Senate would have to strike a balance between raising revenues for the government and not putting too much burden on consumers.

“The job of the Senate is also to temper taxes that would be imposed to the public,” he told reporters, noting that tobacco and beverage companies would only pass on additional taxes to consumers once the sin tax bill is passed.

The House version imposes higher taxes on tobacco and alcohol brands classified as high-priced. Those considered low- and medium-priced will be levied lower taxes.

Santiago’s Senate Bill No. 2998 calls for a “unitary excise tax system for each category of tobacco products.” Incremental revenues will be earmarked for “universal health coverage, disease prevention, health promotion campaigns” and the livelihood of tobacco farmers who would be affected by the measure.

In his SB No. 2764, Lacson said his proposed tax excise system would be “simple, effective and efficient.”

“It will reduce administrative complications associated with current multi-rate structure, provide a market conducive to pure competition, raise revenues and discourage tobacco consumption,” he said in the explanatory note.