Senator Enrilo and President Aquino exchanging sign pens during the signing of the Sin Tax Bill.

Photo from Inquirer.net The Sin Tax Bill of the Philippines has been signed by the President last December 20, 2012 and took effect yesterday January 1, 2013. President Benigno Aquino said that the signing of the bill is an early Christmas gift to the Filipinos. The newly signed law Republic Act No. 10351 (An Act Restructuring the Excise Tax on Alcohol and Tobacco) was expected to generate P33.96 Billion revenue in its first year being implemented. The President, a smoker himself said during the signing, The enemy was strong, noisy, organized and had deep pockets but as I have always said, there is nothing that can stop Filipinos who are marching in the right direction, at the signing ceremony. The aim of the bill is to have an additional revenue by increasing taxes to the so called sin products like alcohol beverages and cigarettes. Workers and farmers in Tobacco industry was reassured by Aquino that they will not lose the benefits they have been receiving before. Instead, they will have a stronger support from the government and the previous benefits will increase. My Personal Thoughts About the Bill Just this morning, I went to a nearby sari-sari store to buy a pack of 10 cigarettes which is supposed to be P20 but I was then told by the store owner that the price was increased P25 per pack because of the sin tax bill. I myself was happy because this bill can help me reduce my smoking. I have been planning to quit smoking but still I cant control my craving for nicotine. With the increase of taxes in sin products, I believe it can reduce my smoking and drinking alcohol.

Sin Taxes In The Philippines?

It has finally arrived! The issue of having sin taxes finally reached the country and has caught the publics eyes. Sin taxes, according to Investopedia (investopedia.com), mean that well be adding taxes to vices such as drinking, smoking and gambling. The Senate had just had their third Senate hearing regarding this matter (update yourself by checking it out here). So many factors will definitely be affected, even economically. With my little knowledge on Economics, I know that when the price is low, the demand is high and when the price is high, the demand is low, a basic concept. This basic principle in Economics is exactly what the sin tax is targeting. The country could receive a striking blow economically because there are quite a big number of locals who succumb to these vices. For instance, our local farmers, who

work daily to pick tobacco leaves and other ingredients in cigarettes, may lose their livelihood. It is what keeps them and their family with food and money for the education of their children. Without this, where would they be? What could they do? Is there an alternative prepared by the government to compensate their loss, if not money? Will they be given another job? Fear not! These farmers will (supposedly) get an incentive. According to an article on the Philippine Daily Inquirers Opinion column (click here for the full article) by Walden Bello last May 31st, 2012, farmers will get earmarked funds equivalent to 15 per cent of the incremental revenues from tobacco taxes that will be devoted to safety nets and alternative livelihood projects. The Department of Health is pushing for this Law to be passed as to lessen the number of death due to these vices. Excessive drinking and smoking proves to be very detrimental. Some may get off with minor illnesses but you will never know when it is too much. When the limit is reached, you wont even know it. You may have cancer. The word may, need not apply because it may be too late. Also according to Walden Bello in his column, 300,000 people now die yearly from smoking-related diseases, and the majority of them come from the poor. What is the cost of losing this much Filipino each year compared to passing this reform bill? So, how can the government control the number of the affected people? Pass the sin tax. Everything has its advantages and disadvantages. In this case, an advantage is that the Filipinos can benefit from a healthier, cleaner, air and have fewer casualties to the smoking-related diseases. There could be more if we just knew how to look at the bill in anothers perspective. According to Mariah Reodica, the sin tax reform bill can put us to a disadvantage as well. She said, The problem with sin taxes too is that it actually encourages people to partake in vices more (if they can afford it, that is) because they feel like paying for the sin tax is a way of justifying that they dont have to feel guilty for their vices. To this, we can say, yes, it is indeed true but remember, according to Walden Bello, most of the smoking-related deaths each year come from the poor. With the passing of this bill, we can lessen the majority of the death to a minority. In this issue, we are faced with the dilemma as to whom we should prioritize. Is it the farmers and laborers who get up each day to make a living for them and their family or to prevent the youth who, through excessive smoking, may develop disorders in their organs or worse, cancer? Everyone has an opinion to everything. Even the youth has a say to this matter. Whats yours?

Sin tax is also a health tax

By Rina Philippine Daily Inquirer 7:48 pm | Monday, August 27th, 2012

Jimenez-David

Increased smuggling, tobacco farmers losing their livelihood, even the rights of individuals who, despite countless warnings, persist in maintaining their smoking habitall these have been brought up as legitimate concerns that legislators should take into consideration as they debate and get ready to vote on the sin tax bill. At the risk of oversimplifying, the bill proposes to increase the taxes on tobacco and alcohol products (in the case of tobacco, a three-tier system of taxation will be adopted) not just to enable the government to earn more taxes, but also to collect more money for the governments efforts to limit tobacco and alcohol use. Cancer is one disease that has been linked to smoking, the current theory being that nicotine and other substances in cigarettes not only cause cancer but also lower the capacity of a smokers immune system. Medical authorities also assert that aside from cancers, smoking has also been linked to heart attack, stroke and chronic obstructive pulmonary disease (the disease that killed King of Comedy Dolphy), three major causes of deaths in the Philippines. The annual cost of diagnosing and treating these four leading smoking-related diseases, says a primer on the issue, is a staggering P177 billion. Indeed, even if the sin tax bill is approved, the government is expected to only generate an estimated P33 billion from the first year of its implementation. Still, the money would come in handy, especially in putting in place a system of universal health care. At the same time, by increasing the price of tobacco to a point where youth and children cannot afford it, we are preventing young people from taking up this deadly habit. *** The sin tax is commonly perceived as a revenue bill, since it would raise the taxes imposed on socalled sin products. The thinking is that since cigarettes and liquor are not essential products (save maybe for addicted smokers and alcoholics), they can be considered optional or luxury products that smokers and drinkers would be willing to pay premium prices for. The reality, though, is that the Philippines has among the lowest prices for cigarettes and liquor in the region. Cheap cigarettes, paired with uncontrolled advertising and promotional activities, made smoking a most accessible and available habit, one fostered, among other things, by peer pressure. Which is why the Department of Health is urging the Senate (the bill has been passed by the House of Representatives) to look at the proposed measure as a health bill, and more specifically, as an anti-cancer tax. What we are asking our good senators is to put the health of our people as the priority concern in approving this tax measure, says a group of health experts. It is just right and responsible to tax the tobacco industry considering the billions of pesos that our health care is forced to carry because of the disease burden from smoking. *** Health concerns regarding smoking gain even more urgency considering that lung cancer (the form of cancer most directly linked to smoking, but not the only one) is the leading cancer in the country, and that if we do not do something, there will be a major epidemic of lung cancer among Philippine men. (A study in 2008 showed that 11 percent of all deaths in the Philippines were attributed to cancer.) The World Health Organization, says the briefing material, estimates that a fourth of all types of cancers can be attributed to smoking. Tobacco is responsible for 71 percent of lung cancer deaths in the world, says the material, while the high rates of lung cancer among Filipinos can be attributed to high smoking rates, particularly among men. Surveys estimate that about half of all men in the country are currently smoking. It will not be surprising to see an epidemic of lung cancer among our productive members in the workforce within the next 10-15 years. While this is expected mainly among men, a lot of women will also develop lung cancer from exposure to second-hand smoke. This leads to an almost-apocalyptic scenario, though based on facts and reality. (M)any children

(will be) orphaned early and will have a negative effect on our economic development. This will also cost the Philippines billions of pesos for health care, chemotherapy and palliative care. A major lung cancer epidemic could deplete our resources for universal health care. So we need to focus on prevention. *** Not only that. While smoking may be the leading cause of lung cancer, it can also increase the risks of other types of cancer, such as cancer of the larynx, esophagus, stomach, pancreas and the colon, and anus. In one conference on cervical cancer, one speaker also mentioned a stronger link between smoking and cervical cancer than even lung cancer. This was mainly because of nicotines adverse effect on immunity levels. You dont even have to be a smoker to be at risk of cancer. You just have to live with a smoker, or spend a lot of time with one. The International Agency on Cancer Research classifies second-hand smoke as a carcinogen, and since cigarette smoke mixes with other noxious elements in the air, its impact on the second-hand smoker could be even worse. The WHO says that half of all Filipino women and children are exposed to second-hand smoke. Many women develop cancer not because they smoke but because they live with smokers. Truly, the sin tax bill is a bill for health, a bill against cancer.

I have chosen to discuss about this article for the very reason of its importance and relevance in our country especially concerning the economic situation we are presently having. The article talks about the effects of sin tax bill once it is approved in the senate. It tackles about the advantages and disadvantages the bill brings forth. In order for us to fully understand the situation let us dissect the topic into two main components. First, the cons of having such a bill, some of it was mentioned on top of the article like the increase in occurrence of smuggling for both tobacco and liquor, the risk of tobacco farmers losing their livelihood and aside from that I could also include the layoffs of some employees in a liquor factory. Overall the main argument that I could see on this side of the fence would be the downfall of common employees and workers connected to the tobacco and liquor industry. And as a concerned citizen, we should not take this situation lightly even though it is only in this sector of the economy, since we can still consider them to be the lifeblood of the economy. Now let us discuss the pros of having the sin tax bill approved. Several points were raised in the article. One good point would be the increased revenue the government would be receiving. By having such bill, the revenue the government raises could be put to good use in several ways. The budget could be allocated for programs that limit the use of tobacco and alcohol which for me would be a positive move in part of the government to make our citizens more health conscious. Thus leading to a more productive workforce, since most of the tobacco and liquor consumers are the young adult and middle aged men. Another advantage of having such a bill would be a decrease in the cost of health care. It was mentioned in the article that annually the government uses an average of P177 billion just in diagnosing and treating smoke related illnesses such as lung cancer, heart attack and stroke. Imagine if this budget would be slashed down. Then the money not used could be

placed in other important departments within the government. It was also highlighted in the article the other damaging effects of smoking especially here in the Philippines. A recent study has revealed that one of the most common causes of mortality here in the Philippines would be diseases relating to tobacco use. By approving the sin tax bill, I believe the government somehow limit the societys consumption of tobacco. A more expensive cigarette would not only make adults in rethinking to buy but minors as well. Lastly due to tobacco use minors end up being orphaned at a very young age. This would then have a negative economic development in our society as a whole since the youth needs guidance from their parents on how to become productive members of the society when they reach the age of maturity. The article brings up a very good point. After careful evaluation, I find the benefits of approving the sin tax bill outweigh any drawbacks. It is therefore in my humble opinion that its approval in the senate must be prioritized by our lawmakers. As the article ended it sin tax bill is a bill for health, a bill against cancer, therefore a bill for a better future.

Sin tax is also a health tax

By Rina Philippine Daily Inquirer 7:48 pm | Monday, August 27th, 2012 Jimenez-David
Increased smuggling, tobacco farmers losing their livelihood, even the rights of individuals who, despite countless warnings, persist in maintaining their smoking habitall these have been brought up as legitimate concerns that legislators should take into consideration as they debate and get ready to vote on the sin tax bill. At the risk of oversimplifying, the bill proposes to increase the taxes on tobacco and alcohol products (in the case of tobacco, a three-tier system of taxation will be adopted) not just to enable the government to earn more taxes, but also to collect more money for the governments efforts to limit tobacco and alcohol use. Cancer is one disease that has been linked to smoking, the current theory being that nicotine and other substances in cigarettes not only cause cancer but also lower the capacity of a smokers immune system. Medical authorities also assert that aside from cancers, smoking has also been linked to heart attack, stroke and chronic obstructive pulmonary disease (the disease that killed King of Comedy Dolphy), three major causes of deaths in the Philippines. The annual cost of diagnosing and treating these four leading smoking-related diseases, says a primer on the issue, is a staggering P177 billion. Indeed, even if the sin tax bill is approved, the government is expected to only generate an estimated P33 billion from the first year of its implementation. Still, the money would come in handy, especially in putting in place a system of universal health care. At the same time, by increasing the price of tobacco to a point where youth and children cannot afford it, we are preventing young people from taking up this deadly habit. *** The sin tax is commonly perceived as a revenue bill, since it would raise the taxes imposed on socalled sin products. The thinking is that since cigarettes and liquor are not essential products (save maybe for addicted smokers and alcoholics), they can be considered optional or luxury products that smokers and drinkers would be willing to pay premium prices for. The reality, though, is that the Philippines has among the lowest prices for cigarettes and liquor in the region. Cheap cigarettes, paired with uncontrolled advertising and promotional activities, made smoking a most accessible and available habit, one fostered, among other things, by peer pressure. Which is why the Department of Health is urging the Senate (the bill has been passed by the House

of Representatives) to look at the proposed measure as a health bill, and more specifically, as an anti-cancer tax. What we are asking our good senators is to put the health of our people as the priority concern in approving this tax measure, says a group of health experts. It is just right and responsible to tax the tobacco industry considering the billions of pesos that our health care is forced to carry because of the disease burden from smoking. *** Health concerns regarding smoking gain even more urgency considering that lung cancer (the form of cancer most directly linked to smoking, but not the only one) is the leading cancer in the country, and that if we do not do something, there will be a major epidemic of lung cancer among Philippine men. (A study in 2008 showed that 11 percent of all deaths in the Philippines were attributed to cancer.) The World Health Organization, says the briefing material, estimates that a fourth of all types of cancers can be attributed to smoking. Tobacco is responsible for 71 percent of lung cancer deaths in the world, says the material, while the high rates of lung cancer among Filipinos can be attributed to high smoking rates, particularly among men. Surveys estimate that about half of all men in the country are currently smoking. It will not be surprising to see an epidemic of lung cancer among our productive members in the workforce within the next 10-15 years. While this is expected mainly among men, a lot of women will also develop lung cancer from exposure to second-hand smoke. This leads to an almost-apocalyptic scenario, though based on facts and reality. (M)any children (will be) orphaned early and will have a negative effect on our economic development. This will also cost the Philippines billions of pesos for health care, chemotherapy and palliative care. A major lung cancer epidemic could deplete our resources for universal health care. So we need to focus on prevention. *** Not only that. While smoking may be the leading cause of lung cancer, it can also increase the risks of other types of cancer, such as cancer of the larynx, esophagus, stomach, pancreas and the colon, and anus. In one conference on cervical cancer, one speaker also mentioned a stronger link between smoking and cervical cancer than even lung cancer. This was mainly because of nicotines adverse effect on immunity levels. You dont even have to be a smoker to be at risk of cancer. You just have to live with a smoker, or spend a lot of time with one. The International Agency on Cancer Research classifies second-hand smoke as a carcinogen, and since cigarette smoke mixes with other noxious elements in the air, its impact on the second-hand smoker could be even worse. The WHO says that half of all Filipino women and children are exposed to second-hand smoke. Many women develop cancer not because they smoke but because they live with smokers. Truly, the sin tax bill is a bill for health, a bill against cancer.

I have chosen to discuss about this article for the very reason of its importance and relevance in our country especially concerning the economic situation we are presently having. The article talks about the effects of sin tax bill once it is approved in the senate. It tackles about the advantages and disadvantages the bill brings forth. In order for us to fully understand the situation let us dissect the topic into two main components. First, the cons of having such a bill, some of it was mentioned on top of the article like the increase in occurrence of smuggling for both tobacco and liquor, the risk of tobacco farmers losing their

livelihood and aside from that I could also include the layoffs of some employees in a liquor factory. Overall the main argument that I could see on this side of the fence would be the downfall of common employees and workers connected to the tobacco and liquor industry. And as a concerned citizen, we should not take this situation lightly even though it is only in this sector of the economy, since we can still consider them to be the lifeblood of the economy. Now let us discuss the pros of having the sin tax bill approved. Several points were raised in the article. One good point would be the increased revenue the government would be receiving. By having such bill, the revenue the government raises could be put to good use in several ways. The budget could be allocated for programs that limit the use of tobacco and alcohol which for me would be a positive move in part of the government to make our citizens more health conscious. Thus leading to a more productive workforce, since most of the tobacco and liquor consumers are the young adult and middle aged men. Another advantage of having such a bill would be a decrease in the cost of health care. It was mentioned in the article that annually the government uses an average of P177 billion just in diagnosing and treating smoke related illnesses such as lung cancer, heart attack and stroke. Imagine if this budget would be slashed down. Then the money not used could be placed in other important departments within the government. It was also highlighted in the article the other damaging effects of smoking especially here in the Philippines. A recent study has revealed that one of the most common causes of mortality here in the Philippines would be diseases relating to tobacco use. By approving the sin tax bill, I believe the government somehow limit the societys consumption of tobacco. A more expensive cigarette would not only make adults in rethinking to buy but minors as well. Lastly due to tobacco use minors end up being orphaned at a very young age. This would then have a negative economic development in our society as a whole since the youth needs guidance from their parents on how to become productive members of the society when they reach the age of maturity. The article brings up a very good point. After careful evaluation, I find the benefits of approving the sin tax bill outweigh any drawbacks. It is therefore in my humble opinion that its approval in the senate must be prioritized by our lawmakers. As the article ended it sin tax bill is a bill for health, a bill against cancer, therefore a bill for a better future.

Tobacco sin tax will not benefit tobacco farmers lawmakers

12 1 1524 2

By INA ALLECO R. SILVERIO Bulatlat.com MANILA Progressive lawmakers have put their foot down against six taxes on tobacco. Lawmakers from Anakpawis and Bayan Muna said the sin tax bill Congress approved on third reading last June 6, 2012 will not benefit local tobacco producers. In the name of providing more funds for the universal health coverage program, the Department of Finance wants to pass a regressive tax measure that will further burden local tobacco farmers and consumers alike, the lawmakers said.

House Bill 5727 intends to put up a two-tier excise tax system for tobacco. In the proposed system, cigarette packs with a net retail price of P11.50 ($0.27) or less will have an excise tax of P12.00 ($0.28) for the first year, and P22.00 ($0.52) for the second year. These are equivalent to an increase of 341 percent and 709 percent respectively. On the other hand, cigarette packs that sell more than P11.50 ($0.27) at retail will have an excise tax of P28.30 ($0.67) for the first year, and P30.00 ($0.71) for the second year. These are equal to an increase of 940 percent and 1,003 percent respectively. Proponents of the sin tax bill in the Department of Finance said that if passed, the measure will lead to the generation of incremental revenue amounting to P31 billion ($738 million). Aquino said he recently signed the bills certification as urgent. Earlier in May, President Aquino himself said the sin tax bill is a priority measure of his administration. He said the revenues it will generate will benefit all tobacco-growing areas, and go toward funding health-related and income-generation activities for tobacco farmers. According to the president a known smoker the current tax system discourages new players from joining the tobacco industry. With the passage of a new tobacco tax law, he pointed out that new players can enter the fray and provide healthy competition, raising the price of tobacco sold by farmers. Anakpawis Rep. Rafael Mariano, however, said the Aquino governments main concern with the sin tax is to raise more revenues and not about health-related issues brought about by cigarette and alcohol consumption. This was a direct hit against the claims of lobbyists for the bill that the tobacco sin tax bill is a measure to push for healthier habits and lifestyles among Filipinos. Bayan Muna Rep. Neri Colmenares, in the meantime, pointed out that tobacco farmers have yet to take advantage of the tobacco excise tax collection as mandated by Republic Act 7171, supposedly aimed at developing the tobacco industry. The government has not provided a comprehensive program for the support services, subsidy and assistance to tobacco farmers. Tobacco farmers will not benefit from the increase of retail prices of cigarettes increase due to sin tax. The sin tax, like the value added tax (VAT) and other regressive taxes, will not have a trickle down effect on the public, he said. The two lawmakers further warned that the tobacco tax hike will exacerbate the countrys current unemployment problem. It is everyones right to have gainful employment. With this tax measure, not only the tobacco industry will be affected but also the sectors and industries which depend on it, Mariano said. Is it reasonable to use the bill as platform for putting people out of work? Colmenares also expressed apprehension that the high tax imposition on tobacco products would lead to an influx of illegal or smuggled cigarettes into the country, like the experience of other countries such as Singapore, Malaysia, and United Kingdom. According to studies, when the government increased tobacco excise tax by 135 percent, the volume of illegal cigarettes seized by Singapore Customs increased from eight million cigarettes in 2000 to 106 million in 2006 or a significant 1225 percent increase. Malaysia also experienced the rampant smuggling from 2004 to 2009 where the illicit trade reached 38 percent, while

United Kingdom recorded a revenue loss estimated at 45 billion after imposing taxes three to seven percent higher than the inflation. Earlier, Bayan Muna Rep.Teddy Casio, together with Gabriela Representatives Luzviminda Ilagan and Emmie de Jesus, attacked the amended House Bill 5727 describing it as regressive, anti-poor, and anti-Filipino. The partylist representatives added that a tobacco tax hike will not only burden consumers but also workers. They cited recent employment statistics from the National Statistics Office (NSO) stating that as of April 2012, workers in the agriculture sector comprised the second largest group, consisting one-third (33.0 percent) of the total employed. While 15.6 percent of the total employed are in the industry sector, with the manufacturing sub-sector contributing the largest share in this sector (8.4 percent of the total employed). The unemployment rate in 2011 was seven percent, which is equivalent to 2.8 million Filipinos. What will happen to the unemployment rate once smuggling kicks into high gear in the country? Production of local-produce will go down due to a shift in consumption to cheaper smuggled items and this logically will translate to fewer jobs, they said. They added that not only tobacco farmers will be affected once the tobacco tax hike is implemented and that there are other sectors relying on this industry, as well as the retailers, wholesalers, and traders.
Source: http://www.electionsphilippines.com/aquino-signs-sin-tax-bill-into-law-inquirer-net

The Sin Tax Law was signed last December by our president Ninoy Aquino. Mr. Aquino said the law was a victory against the powerful tobacco lobby and would provide extra funds for better healthcare and facilities. Our country is considered to be having one of the highest incidence in the region, resulting to about 177 billion pesos for smoke related disease. The fact that we spent billions of pesos just for tobacco related diseases shows that the law will be of big help to our country. Higher taxes will be implemented to tobacco and alcohol industries that will aim to discourage Filipinos from buying these items.

The law produced a lot of mixed emotions from the Filipino people most especially those who are affected by it. The president believes that the law will help save millions of Filipino lives and help build healthcare centers through the tax collected from the law. But at the same time, others believe that the law will encourage smuggling. Also, the increase in price would definitely make those people fond of smoking and drinking irritated. As we all know, there are certain advantages and disadvantages in every law, and the Sin Tax Law is of no exception to this. Let me start by pointing out the advantages the law offers. First advantage of the law would be the revenues to be generated from the measure would be used to fund health insurance programs for the

poor, and build and renovate hospitals in the country. This will be a big boost for our country since there are a lot of poor people that cannot afford to have their own insurance and with the renovation of hospitals, we will be having better services to offer to the people. Second advantage of the law is that it will discourage a lot of people from smoking and drinking alcohol. According to the DOH, smoking kills 10 Filipinos every hour, while the country loses nearly P500 billion annually from healthcare costs and productivity losses, according to an anti-tobacco group. Excessive drinking on the other hand caused a number of deaths through stroke or road accidents. If we reduce the number of people drinking and smoking, then we reduce the risk of death. As to what our president said, every Filipinos life is sacred. In economics the law of demand shows that if price increases, demand decreases. The decrease in the demand will lead to tobacco and alcohol companies to reduce their production, which is the aim of the law. Although we consider this law to be positive, it also has certain disadvantages. First, it is said to be that the law will encourage smuggling. Smuggling severely harms the economy of a country in several ways. It undermines the local industry and discourages legal imports. Second, a lot of Filipino workers will surely lose their jobs and benefits. The law may force some tobacco and alcohol companies to close. This will be a big let down to our country because we want to reduce our unemployment rate. High unemployment rates would lead to the downfall of our country and this is one thing that we do not want to happen. In most cases, the government has to provide benefits to those who are unemployed therefore the nation not only has to deal with the lost income and decreased production but also with additional cost. Even thought the bill has been passed, it is still an ongoing debate whether it brings us positive or negative effects. People have their different opinions about the bill but whats really important is everyone should benefit from it. That is the challenge that our president faces, how to bring out the best in everyone. The advantages of the law as mentioned, were increase in revenue and reducing health risks. On the other hand, disadvantages mentioned were the law encourages smuggling and the risk of higher unemployment. I believe that this law can only do so much. Discipline must come from within. Everything in excess is bad therefore control is needed. Take care of yourselves because our country needs you.

Philippines Congress Ratifies Revised Sin Tax Bill

By Mary Swire, Tax-News.com, Hong Kong 13 December 2012

The Congress of the Philippines has ratified an excise reform on alcohol and tobacco widely described as the "Sin Tax Bill," following agreed revisions that reconcile House and Senate versions. The final version includes a unitary tax regime by 2107 and a rise in excise on tobacco from 29% to 63% by the same year. Measures affecting alcohol include a tax of PHP20 (USD0.49) per liter for distilled spirits and fortified wines (defined as being more than 25% alcohol) from 2013, plus an ad-valorem tax of 15%. This tax will rise to 20% in 2015, and the PHP20 tax added to the net retail price will rise yearly by 4% from 2016.

Still and carbonated wines will see rises of PHP30 or PHP60 depending on whether alcohol content is above 14%, while sparkling wines, champagnes, and fermented drinks will have hikes based on retail price. All fermented drinks will be at a unitary rate of PHP23.50 per liter by 2017. Excise on tobacco will rise from 29% to 63% by 2017. From 2013, cigars will be taxed at 20% VAT plus a specific tax of PHP5 per cigar, with the PHP5 tax rising by 4% each year. Cigarettes packed by machine will be taxed more highly than cigarettes packed by hand, and the rate for machine-packed cigarettes will relate to net retail price. By 2017, a unitary rate of PHP30 per pack will apply to machine-packed cigarettes. The Bill also replaces a price classification for tobacco which had formerly been frozen at 1996 prices, and removes arrangements that have favored brands introduced at an earlier date. According to a statement by Finance Secretary Cesar V. Purisima, the new rates for tobacco are close to the international standard recommended by the World Health Organization and the World Bank, while the rates for distilled spirits are compliant with the World Trade Organization. Purisma regards the Bill as bringing "to closure this 16-year struggle for a better excise tax regime on tobacco and alcohol." Despite warnings that projected revenues from the tax hikes were over-optimistic, Purisma reaffirmed expectations that the reform will bring in more than PHP30bn over the next year. Some lawmakers warn that the changes will harm tobacco farmers and encourage smuggling. However, the Bill specifies that manufacturers must procure 15% of their tobacco from locally-grown sources, and it includes the provision that "unique, secure and non-removable identification markings" must be added to the products.

Sin Tax Bill

The Sin Tax Bill (House Bill 5727 and Senate Bill 3249) is a bill which aims to restructure the existing taxes imposed on alcohol and tobacco goods. It's goal is to promote health by discouraging vices. Furthermore, with higher taxes and higher costs, these products can be potential revenues that will help fund the Universal Health Care program of the Philippine government. This bill is expected to bring about PHP 31 billion additional revenues: PHP 27 billion from the tobacco industry and PHP 4 billion from the alcohol industry. The House of Representative version of the bill is authored by 1st District of Cavite Representative Joseph Emilio Abaya, who is also the Chairman of the Committee on Appropriations; the Senate version is authored by Senator Franklin Drilon. Click to read the original House of Representatives and Senate versions of the bill.
Contents
[hide]

1 Background 2 Main points 3 Reactions

o o o

3.1 Department of Health Secretary 3.2 Tobacco growers 3.3 Urban poor group

4 References

5 External links 6 Citation

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Background

According to the Department of Health (DOH), almost 17.3 million Filipinos are tobacco consumers. About 1,073 cigarette sticks are consumed by Filipinos annually. This high consumption rate is seen as a result of low cigarette prices in the country. Smoking is seen as one of the primary factors responsible for 71 percent of lung cancer deaths in the world. According to DOH statistics, lung cancer is the leading form of cancer in the country, and that 10 Filipinos die every hour because of smoking. DOH also states that a 10 percent increase in tobacco taxes will reduce the number of smokers, which in turn will reduce the number of smoking-related illnesses and deaths. Excessive alcohol drinking, on the other hand, may lead to: Vehicular accidents Fetal deformities Violence/crime Productivity losses Suicide Fires Accidental falls

The Department of Finance (DOF) determined the flaws in the current system of taxing sin products, as detailed by the following: Under the Prize Classification Freeze, old brands are taxed differently from new ones Because of multi-tiered tax structure, smokers tend to prefer cheaper cigarette brands. According to the statistics provided by the Bureau of Internal Revenue (BIR), consumers downshifted from medium-priced cigarettes to low-priced cigarettes. In the case of alcohol, consumption of low-priced beers ballooned from less than 40% in 1994 to more than 70% in 2010. As tax is affected by inflation, tax burden decreases due to lack of price indexation. The country's taxation on distilled spirits is non-compliant with the World Trade Organization (WTO) rules.

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Main points

Excise taxes of distilled spirits will be in accordance with their alcohol content. 1. By January 2012, it will be P317.45 per proof liter; January 1, 2013, PHP 233.73 per proof liter; and January 1, 2014, PHP 150.00 per proof liter. On the years that will follow, excise tax rates will be adjusted to the present value using the appropriate alcoholic drinks price index by the NSO.

By January 2012, excise taxes of wines will be collected per liter of volume capacity 1. Regardless of proof, it is PHP 300.00 for sparkling wines/champagnes and PHP 50.00 for still wines. On the years that will follow, excise tax rates will be adjusted to the present value using the appropriate alcoholic drinks price index by the NSO. 2. Fortified wines, or natural wines with distilled spirit to increase alcohol strength, shall be taxed as distilled spirit.

By 1 January 2012, excise taxes of fermented liquor (beer, lager beer, ale, porter and other fermented liquors except tuba, basi, tapuy and similar fermented liquors) will be PHP 25.00 per liter. Every year thereafter, excise tax rates will be adjusted to the present value using the appropriate alcoholic drinks price index by the NSO. Tax for tobacco products, which are twisted by hand or reduced into a condition to be consumed in any manner other than the ordinary mode of drying and curing, or prepared or partially prepared with or without the use of any machine or instruments or without being pressed or sweetened, will be PHP 2.50 per kilogram. 1. Tax for tobacco products which are specially prepared for chewing will be PHP 1.87 per kilogram. Every year thereafter, excise tax rates will be adjusted to the present value using the appropriate tobacco products price index by the NSO.

Tax for cigars and cigarettes will be PHP 200 per cigar. Every year thereafter, excise tax rates will be adjusted to the present value using the appropriate price index by the NSO. 1. Tax for cigarettes packed by hand will be PHP 14 per pack on January 2012, PHP 22 per pack on January 2013, and PHP 30 per pack on January 2015. Every year thereafter, excise tax rates will be adjusted to the present value using the appropriate tobacco products price index by the NSO. 2. Tax for cigarettes packed by machine will be PHP 14.00 per pack if the net retail price is PHP 10.00 and below per pack, and PHP 30.00 per pack if the net retail price is more than PHP 10.00 per pack by January 2012; PHP 22 per pack if the net retail price is PHP 10.00 and below per pack; PHP 30.00 per pack if the net retail price is more than PHP 10.00 per pack by January 2013; and PHP 30.00 per pack by January 2014. Every year thereafter, excise tax rates will be adjusted to the present value using the appropriate tobacco products price index by the NSO.

Under RA 8240 or the Act Amending Sections 138, 139, 140 and 142 of the National Internal Revenue Code, 15 percent of the incremental revenue collected from the excise tax on tobacco products will be allocated and divided among provinces which produce burley and other native tobacco in accordance with the volume of tobacco leaf production. Funds will be utilized for programs to promote viable alternatives for tobacco farmers and workers. A portion of incremental revenues will be allocated to finance the Universal Health Care program of the government, the amount of which will be based on the annual requirement of the said program as determined by DOH.

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Reactions

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Department of Health Secretary

During the Senate committee on ways and means hearing on the excise tax reform bill or sin tax bill, DOH Secretary Enrique Ona said that this bill with immediately affect the comfort and pockets of smokers as well as farmers and manufacturers. However, he added that regardless of where people are coming from, this bill needs to be passed for a healthier nation, a longer life expectancy for many people and a chance to rapidly modernize the Philippine health system-that is, its public health interventions and hospital system. Secretary Ona articulated the health implications of smoking. In the Philippines, cancer of the lungs, bronchus, trachea or windpipe, and gastrointestinal tract or bituka is one of the four leading causes of death. He emphasized that according to the National Nutrition and Heart Survey of 2008, smoking does not only cause cancer and lung diseases; it also leads to stroke and heart attack. Ona added that it is alarming that the Philippines is the number one smoking country in Southeast Asia. He was also disturbed at the high prevalence of smoking among young Filipino girls and boys. Of tobacco users in the country, 17.5% are girls and 28.3% are boys aged 13-15 years. Early smoking can eventually lead to an earlier onset of smoking-related diseases. Ona ended his presentation by saying that the additional revenues that will come from this tax reform would help ensure the financial stability of the country's universal health care program that will surely benefit all Filipinos. [edit]

Tobacco growers

Philippine Tobacco Growers Association (PTGA) president Saturnino Distor said that the very high tax of as much as 708 to 1,000 percent on low-priced cigarette brands will push these products out of the market and leave the farmers with no market to sell their produce. He said that tobacco farmers and others who are dependent on the tobacco industry are threatened by the bill. Their group appeals to the Senate to revise the provisions in the House of Representatives tax bill. [edit]

Urban poor group

Elvis Campos of Mamamayan Kilos, Alab ng Maralita said that the government's efforts to put additional taxes on cigarettes and alcohol are anti-poor. He said that the bill will have adverse impact on poor consumers. Campos suggested other ways to raise additional revenues. He also emphasized the importance of collection efficiency and prevention of corruption and smuggling. Aquino signs sin tax bill into law By Matikas Santos INQUIRER.net 11:40 am | Thursday, December 20th, 2012

MANILA, Philippines President Benigno Aquino III signed the Sin Tax reform bill into law Thursday, saying it was an early Christmas gift for Filipinos. Today we sign, finally, a law that will serve as an early Christmas gift for millions of Filipinos, Aquino said in Filipino.

We aim to make health benefits available for all, regardless of wealth, the life of Filipinos is sacred, he said. The Sin Tax Bill aims to raise additional revenues by increasing taxes in so called sin products such as alcohol and cigarettes. A large part of the revenues that will be collected would go to the governments health care program and for the construction and upgrade of local and major hospitals nationwide. The bill is also expected to lessen the number of smokers and alcohol drinkers in the country because of the increase in prices. Aquino reassured workers and farmers in the tobacco industry that they will not lose the benefits they have been receiving before. The benefits you received before will not disappear; it will ac tually increase, as the support from the government grows stronger, Aquino said. Many thought it was impossible to pass the Sin Tax Reform Bill: the enemy is strong, loud, organized, and has deep pockets, he added. But like what has been proven time and again: nothing is impossible to aPhilippines that is rowing in one direction, has the heart in the right place, and ready to stand on principles, Aquino said. The newly signed bill will take effect January 1 of 2013. As long as [the Filipino people], our boss, is behind our backs, no obstacle cannot be overcome, Aquino said. You might wonder why I placed syntax bill in the subtitle instead of sin tax bill. As what we all know, syntax is the arrangement and interrelationship of words in a grammatical construction. In order to achieve the interrelationship of words, we should arrange it in an organized manner for the readers to fully understand the meaning of the words that was constructed. Like what we do in syntax, we should also arrange or organize our thoughts to fully understand the benefits of the so called sin tax bill signed by our President last December 20, 2012. Some of the Filipino farmers is against this bill because it will highly affect their income like what this another article says: -----TOBACCO farmers in Region 1 trooped to the cemeteries on November 1 and 2, not to visit their departed, but to protest what they called the impending death of the tobacco industry once the sin tax bill is passed into law. Angel Gonong of the Tobacco Growers Association of the Philippines said the death of the tobacco industry is imminent once the proposed increase on taxes for sin products, particularly cigarettes, is signed into law. Gonong said their livelihood will be doomed once their produce, currently levied 20 per cent tax, is slapped the additional 30 percent tax.

He explained that class A and B tobacco produce is sold at P40 per kilo and with the higher tax , they will be left earning only P20. The situation is worse for class C, D and E tobacco, he added, which comprises 70 percent of their produce used for low class cigarettes, which would increase in price from the present P10 per 20-stick pack to P30 per pack. So who else would buy the product? he asked. He said farmers earn only P5,000 per hectare for one season and each spend P30,000 per hectare over the three-month production. Farmers plant tobacco for one season per year from December to February. Whats worse is our produce would not be bought anymore next year because buyers would be on a wait- and- see- mode due to expected signing into law of sin tax bill by January and its implementing rules and regulations would be out by February, he said. The main centers of what the group called their tobacco rebellion on November 1 were San Fabian in Pangasinan; the public market in Batac, Ilocos Norte; public cemeteries in Candon, Ilocos Sur; San Isidro Villa Visisosa Cemetery in Abra; and Balaoan in La Union. On Nov. 2, the group was in Batac cemetery. The farmers also started a fund raising drive for their caravan on November 4 from Laoag to the Senate where the group plans to hold a vigil for 21 days beginning November 5 when deliberations on the sin tax bill start. Gonong said their group has about 250,000 members in the tobacco-producing areas in northern Luzon and about six million family members would be affected once the sin tax is approved.Eva Visperas----These farmers have enough reason to disagree in the signing of this bill because of the effects once it is being signed. We might also think of the same way as what these farmers are anticipating. If this bill is being signed, there would be an increase in the price of cigarettes and liquor thus, there would be a decrease of buyers and the income of the tobacco industry will also decrease. Buyers might be discouraged to buy these sin products because of its high price. But these anticipations are partly wrong, our president assures the tobacco farmers that their income will not decrease, instead, it will increase. This bill is not being approved for the benefit of the government officials themselves but for the benefit of us Filipinos. We all know that these sin products can cause tuberculosis, lung cancer and other illness that can greatly damage our health. According to Paul H. Brodish, MSPH in his book "The Irreversible Health Effects of Cigarette Smoking", Cigarette smoking is the leading cause of preventable death in the United States. It accounts for almost 500,000 deaths per year, or one in every five deaths. Cigarette smoking contributes to a remarkable number of diseases, including coronary heart disease, stroke, chronic obstructive pulmonary disease, peripheral vascular disease, peptic ulcer disease, and many types of cancer. Of the 46 million smokers in the United States, 34 percent try to quit each year but less than 10 percent succeed. According to the CDC, approximately 80 percent of current adult smokers began smoking before their 18th birthday. Each day over 3,000 teenagers light up for the first time. Most teens are aware of smokings hazards, but few are worried about them. Moreover, most teen smokers quickly become addicted to nicotine: They report that they want to quit but are unable to do so. And teen smokers experience high relapse rates and debilitating withdrawal symptoms. The bottom line is

that smoking is costly, both to individual smokers and to society as a whole: Recent long-term studies indicate that about half of all regular cigarette smokers will eventually die from their addiction. These products can really be addictive and hard to eliminate. But if we can do something to prevent this addiction, we can start from the youth so that they can be a good example for the other generations to come. The government approved this bill to somehow discourage the buyers in buying the products. I believe that these products are not a necessity and it is not a loss for us, in fact if we continue to use these, it can cause our death. We can live without the sin products. Let us help one another to help promote good health in our country. The proceeds of the taxes will be used to fund the governments health care program and for the construction and upgrade of local and major hospitals nationwide. We should be open to understand the positive effects of this bill. The government tries to help improve the welfare of our economy and not just try to get bigger taxes for their own interest. After all, we are the ones who voted them and we should trust them in fulfillment their responsibilities. As what Abraham Lincoln said "Government of the people, by the people, for the people, shall not perish from the Earth."

MANILA, Philippines - President Aquino signed yesterday the sin tax reform bill into law, paving the way for higher cigarette and liquor prices in the coming weeks. After signing Republic Act No. 10351, Aquino thanked lawmakers who fought to have it passed amid strong lobby against the measure from what he described as groups with deep pockets. Many believed it was impossible to pass the sin tax bill as those blocking its passage were strong, noisy, organized, the President said.

But he said it was ultimately hard work and unity that prevailed and made the day for the sin tax measure. Today, we sign, finally, a law that serves as an early Christmas gift to millions of Filipinos who will be covered by the universal health care program, who will benefit from new public clinics and hospitals that will be built, and who will be discouraged from smoking and drinking, the President said in his speech during the signing ceremony at Malacaang. We have proven: nothing is impossible for Filipinos who are sailing in the same direction, whose hearts are in the right place, and who are ready to fight for their principles, he said.

Headlines ( Article MRec ), pagematch: 1, sectionmatch: 1

In its first year of implementation, the measure is expected to generate for the government additional revenues worth P33.96 billion, of which P23.4 billion will come from cigarettes, P6.06 billion from distilled spirits and P4.5 billion from fermented liquors. The sin tax bill had been pending in Congress since 1997 and the President said many had thought it would already be impossible to have it passed due to conflicting interests. The bill will significantly increase the prices of cigarettes and liquor in the country. The prices of sin products in the Philippines are significantly lower than those in other countries. Contrary to claims by lobby groups, Aquino said tobacco farmers would benefit from the measure in terms of assistance and access to alternative livelihood. The President thanked Senate President Juan Ponce Enrile for showing respect for the passage of the measure despite his being against it. He also praised Speaker Feliciano Belmonte Jr. and Sen. Franklin Drilon for their efforts in ensuring the bills passage. Aquino said Finance Secretary Cesar Purisima, Health Secretary Enrique Ona and Bureau of Internal Revenue Commissioner Kim Henares should also be credited for convincing lawmakers to consider the measure. He called Henares the lead fighter in the trenches for this endeavor. Aquino said that based on the enacted measure, taxes will be uniform and will open the doors for healthy competition in the industry and avoid monopoly. Eighty percent of the incremental revenues after deducting the support for tobacco farmers under RA 7171 will be allocated for universal health care under the National Health Insurance Program, and 20 percent will be allocated nationwide for medical assistance and health enhancement facilities program. Under the sin tax law, the proper tax classification of alcohol and tobacco products will be determined every two years, removing the price/brand classification freeze. This is meant to simplify the current multi-tiered structure to prevent downshifting to lower priced brands.

To prevent the excise taxes from getting eroded by inflation, the excise tax rates will be increased by four percent every year effective 2016 for distilled spirits and 2018 for cigarettes and beer. Officials said the law conformed to the World Trade Organization ruling on distilled spirits and tobacco. Drilon leaves chairmanship Drilon, meanwhile, has given up his role as acting chairman of the Senate committee on ways and means after helping ensure passage of the sin tax reform measure. Sen. Ralph Recto reassumes the chairmanship of the committee. Drilon took over the chairmanship of the committee from Recto last October after the latter decided to give it up in response to allegations that he was defending manufacturers of cigarettes and alcohol. Recto decried what he thought was lack of support from finance officials for his version of the sin tax bill. He had been pilloried by various sectors for pushing for lower tax rates for cigarette and liquor. Apart from the sin tax bill, Drilon also sponsored the bill removing the common carriers tax on foreign airlines and marine vessels. These two important measures, I believe, is a major work that the committee on ways and means undertook for the past two months. Having said that, we believe it is time that we relinquish the acting chair as the only purpose of our having assumed the acting chair is to work first on the sin tax reform measure and second, on this long-pending common carriers tax, Drilon said. Sen. Ferdinand Marcos Jr., for his part, insisted that the sin tax reform measure will promote smuggling of tobacco in the country. He said the government is unlikely to realize its revenue target. Tobacco farmers belonging to the Philtobacco Growers Association (PTGA) also expressed disappointment over the passage of the measure. We are in mourning because this is the beginning of the demise of the tobacco industry in the country, said PTGA president Saturnino Distor. The group believes the excise tax law favors imported brands. Game changer For Health Secretary Enrique Ona, the Sin Tax Reform Law is a game changer that will drastically alter the landscape of the countrys health care system.

The enactment of this law is a victory in our campaign to protect our people, especially the young and the poor, from the ill effects of smoking and excessive drinking, Ona said in a statement in reaction to President Aquinos signing the measure into law. Ona added that by increasing the prices of cigarettes, the number of young and poor peopl e smoking and drinking excessively will be reduced significantly. This in turn, he said, will result in lower incidence of smoking related non -communicable illnesses such as lung cancer, heart attack, strokes and chronic lung disease, as well as diseases associated with excessive drinking such as liver diseases and trauma secondary to drunk driving. Part of the revenues from tobacco and alcohol products will be used to enroll into Philippine Health Insurance Corp. (Philhealth) the poorest 20 percent of the countrys population and upgrade and modernize hospitals and other healthcare facilities, among others. The Department of Health is grateful for the invaluable dedication of Sen. Franklin Drilon, acting chair of the Senate committee on ways and means, and Representative Isidro Ungab, chair of the House committee on ways and means and bill sponsor in their respective chambers, in ensuring that this critical health measure is passed, Ona said. We also recognize the support of our health champions in the Senate and the House of Representatives as well as the Department of Finance, Bureau of Internal Revenue and our partners in the academe, medical societies, patients groups and other members of civil society, he said. Based on DOF projections, the law is estimated to generate cumulative incremental revenue of P184.31 billion from 2013 to 2016, of which P146.7 billion is estimated to be earmarked for health. With Sheila Crisostomo, Marvin Sy, Christina Mendez
Friday, December 21, 2012

STARTING January 1, 2013, companies producing alcohol and tobacco products will be paying more taxes to the government after President Benigno Aquino III signed on Thursday Republic Act 10351 or the Sin Tax Reform 2012. Aquino said the new law aims to favor both the government and the Filipino people since revenues to be generated from the measure will be used to fund health insurance programs for the poor, and build and renovate hospitals in the country. Under the new law, the government is expected to raise additional revenues of P33.96 billion on the first year of implementation. To breakdown, P23.4 billion of the amount is expected to come from cigarettes, P6.06 billion from distilled spirits and P4.5 billion from fermented liquors. Aquino said 80 percent of the expected revenue will be allocated for universal health care under the National Health Insurance Program and 20 percent will be for the medical assistance and health enhancement facilities program.

Aside from the increase revenues, Aquino said the new law is also expected to reduce smoking and drinking of alcohol among Filipinos, especially the youth. With the increase in taxes, it is expected that retail prices of alcohol and cigarette products would also increase. But Senators Ralph Recto and Ferdinand "Bongbong" Marcos Jr. said the bill is expected to displace tobacco farmers and worsen smuggling. Recto also said the increase in excise taxes might lead to massive job dislocation in affected industries. Some politicians argue that even with the increase in taxes and the expected hike in the prices of alcohol and tobacco products, Filipinos would still find ways to buy. Therefore, the law is not a guarantee that the number of Filipinos hooked to the so-called sin products would considerably decrease. But the new law has yet to take effect. We can only see how it fares after a year of implementation. By 2014, we will see if the expected revenue is achieved or not; or whether the statistics would get down. One thing is for sure, the Bureau of Internal Revenue has a great job ahead and that is, to really go after these companies and compel them to pay the correct taxes.

Drilon: Sin tax report must be retained Philippine Star

ReplyFranklin DrilonOctober 23rd, 2012admin

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MANILA, Philippines The Senate ways and means committee report on the so-called sin tax bill declared withdrawn by resigned panel chairman Ralph Recto may be retained after all to ensure the passage of the measure at least by December or early January next year, Sen. Franklin Drilon said yesterday. For me the committee report must be retained. During the period of amendments, this can be changed, new provisions may be suggested and this will be voted upon in plenary, Drilon said. This is what will happen so that there will be no delay. In a caucus late yesterday afternoon, the Senate named Drilon as new committee chairman. He was committee vice chair before Rectos resignation. Sen. Francis Escudero manifested in last Mondays plenary session that the committee report should not be treated as Rectos alone because it carried the signatures of other committee members. Drilon said the Senate may approve the sin tax bill before Congress adjourns on Dec. 21 or by January after the Christmas break. Ideally, he said that the bill should be approved before the Senate starts deliberations on the proposed P2- trillion national budget for 2013. As long as it does not go beyond January (2013). This can be done and there wont be a major disadvantage, Drilon said. Rectos resignation has sparked concerns among anti-smoking advocates of delays in the passage of the sin-tax measure. I hope that (Rectos) committee report will be accepted and that there will be a debate with the new committee chairman. If the report will be scrapped, we will start all over again. Most likely, the bill will no longer be approved this year, Dr. Anthony Leachon, consultant of the Department of Health (DOH) for non-communicable diseases, said in a phone interview. The resignation of Sen. Recto should not delay the passage of a strong sin tax bill within the year. Tobacco will kill an estimated one billion people in the 21st century, in absence of aggressive action by government to advance

tobacco control, the Health Justice Philippines (HJP) said in a statement. In the Philippines, 240 Filipinos die every single day due to tobacco-related diseases. It is unfortunate that most of Filipino smokers belong to the poorest of the poor. These Filipinos have no means to pay for treatment once disease kicks in. There is also a significant number of youth smokers who will later on face the same problems brought about by tobacco use, the group said. With a substantial increase in tax and the correction of a weak tobacco tax system, the youth and the poor are protected from continuing or starting the habit of smoking. Making it less affordable to these vulnerable sectors is an effective measure in ensuring that their right to health is preserved, the group added. For Sorsogon Bishop Arturo Bastes, betel nut and fruit juices can help wean away smokers and alcoholics from their vices. Make these sinful luxuries very expensive so that the people can no longer afford to buy them (cigarettes and liquor). Let them chew betel nut or gum and drink fruit juices, Bastes said. Chewing betel nuts can reportedly help reduce tension and produce a feeling of well being. He said Recto should also be commended for resigning. I do believe that the most important concern is the health of our people, not the economic gains from the sales of cigar and alcoholic drinks, he said. Hundreds of protesters, mostly tobacco farmers, picketed outside the Senate yesterday to dramatize their protest against the measure. They said the measure is likely to have adverse impact on the lives of three million tobacco farmers, particularly in Northern Luzon. Recto had drawn flak from some sectors and from some of his colleagues for his watered down version of the sin tax measure. In Rectos version, the incremental tax take from the measure amounted to P15 billion to P20 billion as against the P31 billion in the House version and P60 billion in Sen. Miriam Santiagos. Drilon said he would also introduce an amendment that would reduce the tax classification on tobacco products to two-tier from three-tier under the Recto report. He said that the two-tier would eventually be eliminated after two years so that there would be a uniform rate for all products. No lobby fund Senate President Juan Ponce, meanwhile, appeared to have calmed down yesterday or a day after lambasting Presidential Legislative Liaison Officer Manuel Mamba for allegedly besmirching the reputation of the Senate with allegations that lobby funds explained the delays in the passage of several measures. To me this is not a joking matter. It involves the reputation of the Senate. As far as I am concerned he can expose me to an investigation and Im sure that the others here can stand an investigation by Mr. Mamba to find out if he is a liar or a truthful person. The ball is on his side, Enrile said last Monday. If I were the President of this country, designating him as a liaison with Congress, for the kind of act in this case, I will fire him on the spot because he is not really helping Malacaang in passing legislation here, he said. Enrile raised the issue of lobby money allegedly being received by the anti-tobacco groups in the country from the Bloomberg Initiative of New York City Mayor Michael Bloomberg. In an interview with reporters yesterday, Enrile said he merely read a document that listed the recipients of funds from the Bloomberg Initiative and the use of the funds for tobacco control programs. Senators Drilon and Pia Cayetano cautioned Enrile against characterizing the funding from the Bloomberg Initiative as lobby money. Drilon said that the list appeared to have been downloaded from the online resources on the Bloomberg Initiative, which were all non-confidential. He said that the money received by the organizations, including the Metropolitan Manila Development Authority and the University of the Philippines College of Law Development Foundation were grants and not lobby money. Even Sen. Panfilo Lacson agreed and said he sees no need for an investigation by the Senate. Its on the website. If it was a lobby fund would you put it in a website? L acson said. Enrile said he believes Mamba would not be able to substantiate his claims anyway. Im thinking that he might not even merit an investigation, Enrile said. He cannot substantiate what hes saying because theres no proof here, he added. Unacceptable At Malacaang, presidential spokesperson Edwin Lacierda said they are open to compromise on the sin tax measure but stressed Rectos version is unacceptable. There was a compromise on the sin tax measure in the House so we agreed on a lower revenue measure. But what happened in the Senate, its really too low. It would not add (up to the funds). And we realized that the legislative

process does not mean that whatever we push they should accept hook, line, and sinker, Lacierda said. Theres a debate and discussion as in any legislative bill coming from anywhere so we recognize that. We recognize the process, he said. with Aurea Calica, Sheila Crisostomo, Evelyn Macairan

MANILA, Philippines - President Aquino signed yesterday the sin tax reform bill into law, paving the way for higher cigarette and liquor prices in the coming weeks. After signing Republic Act No. 10351, Aquino thanked lawmakers who fought to have it passed amid strong lobby against the measure from what he described as gro ups with deep pockets. Many believed it was impossible to pass the sin tax bill as those blocking its passage were strong, noisy, organized, the President said. But he said it was ultimately hard work and unity that prevailed and made the day for the sin tax measure. Today, we sign, finally, a law that serves as an early Christmas gift to millions of Filipinos who will be covered by the universal health care program, who will benefit from new public clinics and hospitals that will be built, and who will be discouraged from smoking and drinking, the President said in his speech during the signing ceremony at Malacaang. We have proven: nothing is impossible for Filipinos who are sailing in the same direction, whose hearts are in the right place, and who are ready to fight for their principles, he said.

Headlines ( Article MRec ), pagematch: 1, sectionmatch: 1

In its first year of implementation, the measure is expected to generate for the government additional revenues worth P33.96 billion, of which P23.4 billion will come from cigarettes, P6.06 billion from distilled spirits and P4.5 billion from fermented liquors. The sin tax bill had been pending in Congress since 1997 and the President said many had thought it would already be impossible to have it passed due to conflicting interests. The bill will significantly increase the prices of cigarettes and liquor in the country. The prices of sin products in the Philippines are significantly lower than those in other countries. Contrary to claims by lobby groups, Aquino said tobacco farmers would benefit from the measure in terms of assistance and access to alternative livelihood. The President thanked Senate President Juan Ponce Enrile for showing respect for the passage of the measure despite his being against it. He also praised Speaker Feliciano Belmonte Jr. and Sen. Franklin Drilon for their efforts in ensuring the bills passage.

Aquino said Finance Secretary Cesar Purisima, Health Secretary Enrique Ona and Bureau of Internal Revenue Commissioner Kim Henares should also be credited for convincing lawmakers to consider the measure. He called Henares the lead fighter in the trenches for this endeavor. Aquino said that based on the enacted measure, taxes will be uniform and will open the doors for heal thy competition in the industry and avoid monopoly. Eighty percent of the incremental revenues after deducting the support for tobacco farmers under RA 7171 will be allocated for universal health care under the National Health Insurance Program, and 20 percent will be allocated nationwide for medical assistance and health enhancement facilities program. Under the sin tax law, the proper tax classification of alcohol and tobacco products will be determined every two years, removing the price/brand classification freeze. This is meant to simplify the current multi-tiered structure to prevent downshifting to lower priced brands. To prevent the excise taxes from getting eroded by inflation, the excise tax rates will be increased by four percent every year effective 2016 for distilled spirits and 2018 for cigarettes and beer. Officials said the law conformed to the World Trade Organization ruling on distilled spirits and tobacco. Drilon leaves chairmanship Drilon, meanwhile, has given up his role as acting chairman of the Senate committee on ways and means after helping ensure passage of the sin tax reform measure. Sen. Ralph Recto reassumes the chairmanship of the committee. Drilon took over the chairmanship of the committee from Recto last October after the latter decided to give it up in response to allegations that he was defending manufacturers of cigarettes and alcohol. Recto decried what he thought was lack of support from finance officials for his version of the sin tax bill. He had been pilloried by various sectors for pushing for lower tax rates for cigarette and liquor. Apart from the sin tax bill, Drilon also sponsored the bill removing the common carriers tax on foreign airlines and marine vessels. These two important measures, I believe, is a major work that the committee on ways and means undertook for the past two months. Having said that, we believe it is time that we relinquish the acting chair as the only purpose of our having assumed the acting chair is to work first on the sin tax reform measure and second, on this long-pending common carriers tax, Drilon said. Sen. Ferdinand Marcos Jr., for his part, insisted that the sin tax reform measure will promote smuggling of tobacco in the country. He said the government is unlikely to realize its revenue target.

Tobacco farmers belonging to the Philtobacco Growers Association (PTGA) also expressed disappointment over the passage of the measure. We are in mourning because this is the beginning of the demise of the tobacco industry in the country, said PTGA president Saturnino Distor. The group believes the excise tax law favors imported brands. Game changer For Health Secretary Enrique Ona, the Sin Tax Reform Law is a game changer that will drastically alter the landscape of the countrys health care system. The enactment of this law is a victory in our campaign to protect our people, especially the young and the poor, from the ill effects of smoking and excessive drinking, Ona said in a statement in reaction to President Aquinos signing the measure into law. Ona added that by increasing the prices of cigarettes, the number of young and poor people smoking and drinking excessively will be reduced significantly. This in turn, he said, will result in lower incidence of smoking related non -communicable illnesses such as lung cancer, heart attack, strokes and chronic lung disease, as well as diseases associated with excessive drinking such as liver diseases and trauma secondary to drunk driving. Part of the revenues from tobacco and alcohol products will be used to enroll into Philippine Health Insurance Corp. (Philhealth) the poorest 20 percent of the countrys population and upgrade and modernize hospitals and other healthcare facilities, among others. The Department of Health is grateful for the invaluable dedication of Sen. Franklin Drilon, acting chair of the Senate committee on ways and means, and Representative Isidro Ungab, chair of the House committee on ways and means and bill sponsor in their respective chambers, in ensuring that this critical health measure is passed, Ona said. We also recognize the support of our health champions in the Senate and the House of Representatives as well as the Department of Finance, Bureau of Internal Revenue and our partners in the academe, medical societies, patients groups and other members of civil society, he said. Based on DOF projections, the law is estimated to generate cumulative incremental revenue of P184.31 billion from 2013 to 2016, of which P146.7 billion is estimated to be earmarked for health. With Sheila Crisostomo, Marvin Sy, Christina Mendez