Senate passes sin tax bill

A vendor sells cigarettes at a supermarket in Quezon City in this file photo. The Senate passed the sin tax bill on Tuesday, Nov. 20, 2012. AFP/JAY DIRECTO

MANILA, Philippines—The sin tax bill was finally approved Tuesday evening after senators concluded their deliberations and amendments on the measure. Certified as urgent by President Aquino, the bill was passed on second and third readings on the same day.

The Senate, after a vote of 15-2, passed the measure, with Senators Joker Arroyo and Francis “Chiz” Escudero voting against the bill. Senator Franklin Drilon, the principal sponsor of the measure, accepted most of the amendments proposed by the other senators.

The deliberation on the bill stalled at one time after Senate President Juan Ponce Enrile pointed out that there was an unfair distortion in the burden sharing of the tax on tobacco and alcohol products.

The bill seeks to collect P40 billion in additional revenues from increased taxes on tobacco and liquor products. The total amount to be collected will be split 60-40, or P24 billion from the cigarettes and P16 billion from liquor products.

Enrile, however, pointed out that there was a distortion in the sharing of the burden after a couple of years with tobacco products getting a higher ratio of as much as 69 percent compared with liquor with 31 percent.

He said that they had previously agreed upon in a caucus that the burden would be shared 60-40, but after he computed the figures, he found there was a “definite bias” for the liquor industry.

The Senate suspended session for at least 30 minutes in order to re-compute their figures and come to an agreement on the rates that were proposed by Senator Ferdinand Marcos Jr.

Marcos and Drilon agreed on the rates and were able to continue with the deliberations taking on several other amendments.

Earlier in the session, Senator Ralph Recto proposed that more than half of the revenue, or P23 billion, be allocated for the Philippine Health Insurance Corp. (PhilHealth) so that an additional 10.4 million families could become members.

Recto also proposed that P10 million be allocated each for the improvement of 618 district hospitals nationwide and P100 million each for the upgrading of 16 regional hospitals and 22 medical centers throughout the country.

Enrile also proposed that a new provision be included in the bill that would require tobacco manufacturers and sellers to source 15 percent of their raw materials from local producers.

He said this was in order to protect the interest of the tobacco farmers in the country, especially those in his home province of Ilocos.