By Mico Agustin

CONSUMER advocates have expressed frustration over the failure of the Senate to include in its approved version of Tax Reform for Acceleration and Inclusion (TRAIN) Act proposed measures seeking to impose higher taxes on cigarettes and other tobacco products.
Ray Junia, convenor of Institute for Institute for Consumer Research and Empowerment (ICORE) said they felt cheated as the senators left out proposals to raise taxes on cigarettes.

Healthier Filipinos
“We are certainly frustrated. The senators could have seized the moment by including proposals to raise tobacco taxes, and in the process create a new generation of healthier Filipinos while also raising revenue for the government coffers” Junia said.
He issued the statement after the Senate voted 17-1 to approve the Tax Reform Acceleration and Inclusion (TRAIN) bill, with Sen. Risa Hontiveros being the lone dissenter.
Under the measure, it is expected that about 6.8 million of the country’s 7.5 million individual income taxpayers would be exempt from paying income taxes starting January.
However, majority of Filipinos would now pay more for fuel, sweetened beverages and electricity even as Sen. Sonny Angara, chair of the ways and means committee, said the measure was expected to generate P100 billion to P130 billion in revenue for the government.

Bicameral Committee
This developed as Sen. Sonny Angara reported that the congressional bicameral conference committee has agreed on at least five provisions of the tax reform package.
That include tax exemptions for all workers earning less than P250,000 a year, and VAT-free leases on housing units below P15,000 a month and condominium dues.
“The P250,000 income tax exemption is close to becoming a reality because both chambers of Congress agreed on the provision,” said Angara, chair of the Senate committee on ways and means.
Angara also disclosed that the bicameral committee had earlier agreed that those with an annual income of more than P8 million would pay P2.41 million plus 35 percent of the excess of P8 million. The committee also retained the provision exempting minimum wage earners from paying taxes.
But Senate President Pro Tempore Ralph Recto said the tax bill, although benefiting 5 million people from the reduction in personal income tax, would hit about 95 million others with consumer taxes.
Contentious provisions such as the excise tax on petroleum, coal and sweetened beverages would be tackled last by the bicameral committee.

Support for Pacquiao Bill
Junia said they are supporting initiatives by some legislators among them Sen. Manny Pacquiao who filed Senate Bill No 1599 seeking to amend Republic Act 10351 or the Sin Tax Reform Act of 2012.
Pacquiao’s proposed measure seeks to increase the current unitary excise tax rate to P60 from P30 per pack, and the annual excise tax to 9% from 4%.
Junia said Pacquiao’s proposal makes a lot of sense because once approved, it is estimated to generate additional P60 to 70 billion for government coffers yearly.
“That’s a lot of money which the government can use in its health projects like building hospitals and providing free medicines especially in the provinces while also discouraging would-be smokers from buying the sin product because of its prohibitive price” Junia added. 

Attained Goals
The Sin Tax Law or Republic Act (RA) 10351 passed in 2012 had the twin goals of reducing cigarette and alcohol consumption while at the same time raising revenues for government health projects through higher taxes on cigarettes and alcohol.
It apparently attained some of its objectives as reports indicated that from 102 billion cigarette sticks sold in 2012, it dropped to 86 billion in 2013 and to 83 -- 84 billion in 2015.
When it comes to excise tax revenues, reports showed that from P32 billion in 2012, sin tax collections reached P100 billion in 2015.
If official reports are to be believed, the law has achieved its objectives of discouraging cigarette consumption and also increasing revenues.
In 2016, the estimated number total of cigarette sticks sold also went down to 70 billion, with excise tax at around P90 billion.

150,000 Deaths Yearly 
“The more revenues from sin products like cigarettes, the more projects and benefits the DoH can dispense with, because the proceeds from the law go directly to the delivery of quality public health services” he explained.
Junia was also worried that there are around 150,000 Filipinos who die from tobacco-related diseases yearly which translates to P400 billion costs for the government in providing treatment to the tobacco-afflicted patients.
Studies showed that among the fatal diseases directly attributable to smoking are chronic obstructive pulmonary disease, heart attack, stroke and lung cancer.
The costs spent by the government for the said diseases totaled as much as P210 billion in 2016.
“The billions being spent by the government to treat smokers who fell ill because of their vice could be reduced significantly if higher taxes are imposed on cigarettes, because surely new and old time smokers will feel the brunt of higher prices (of the product) ” Junia stressed.

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Monday, 15 October 2018
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