Recto sees passage of sin tax bill before yearend

Sen. Ralph Recto. INQUIRER FILE PHOTO

MANILA, Philippines – Senator Ralph Recto on Thursday expressed optimism that the sin tax bill will be passed before the year ends as worries that the proposed measure will kill the tobacco industry persist.

Speaking to reporters after the first committee hearing of the Senate committee on ways and means on HB 5727, “An Act Restructuring the Excise Tax on alcohol and Tobacco Products” or popularly called the sin tax bill, Recto said that by November or December, they will be able pass the bill and signed it into law.

“In a month’s time we can wrap up the hearing, and a week or two at most we can make the committee report a month for the debate in the Senate, a month for the bicam so we can be done by the of the year,” he said.

However, Recto said that they have not determined the exact percentage of the tax increase which will be imposed on liquor and tobacco products adding that the House version states that different tax rates will be enforced on the two industries.

“The idea is to come up with a fair, responsible measure that would generate the revenue as well for the PhilHealth and for the other health needs of the health sector. A fair and reasonable manner,” he said nevertheless.

“Zero percent tax rate, there is nothing to collect; a 100 percent tax rate, there is nothing to collect,” Recto added.

Meanwhile, in a separate interview, Senator Ferdinand Marcos Jr. said that the idea of imposing additional tax on “sin products” is generally accepted by the public but he warned that excessive taxes on liquor and tobacco products will kill the industry and displace millions of Filipinos depending on these for their livelihood.

He added that three million Filipinos are dependent on the tobacco industry alone.

“If the government is bent on reducing the number of smokers, tobacco farmers will be put out of work and it will affect traders. What shall we do to them if they will lose their livelihood?” Marcos pointed out.

Marcos said senators should consider this problem before passing the proposed measure.

He added that the exact number of persons who will possibly lose jobs cannot be determined yet since various sectors give different statistics.

“We must make a careful study of the effects if tax rate will be 10 percent or 20 percent. We have to crunch the numbers so see its impact on the industry,” he said.

Marcos also recommended that an equal tax increase be imposed on beer, liquor and tobacco products. He said that earlier, the Department of Finance submitted a version of the sin tax bill that imposes equal tax increases for these three types of products. However, the version that the House of Representatives passed last June indicated that each type of product have different tax increases.

Present during the committee hearing were Finance Secretary Cesar Purisima, Internal Revenue Secretary Kim Jacinto-Henares, Health Secretary Enrique Ona, Trade and Industry Secretary Gregorio Zaragoza and National Tax Research Center Executive Director Trinidad Rodriguez.

Representatives from private alcohol and tobacco companies, and farmer groups were also present.

House Bill 5727 or “An Act Restructuring the Excise Tax on Alcohol and Tobacco Products, popularly called sin tax bill, aims to increase taxes on alcohol and tobacco products supposedly to increase government income to be used for health care services.