New excise tax regime is ‘better’ or ‘ridiculous’ – take your pick

Voting 10-9 with no abstentions, senators in the Philippines yesterday ratified a measure restructuring the taxes on tobacco and alcohol products, according to a story in The Philippine Star.

The House later followed with its own ratification and the measure now awaits President Aquino’s signature.

The Manila Times, meanwhile, said the Department of Finance had welcomed the fact that the government’s 16-year struggle for a better excise tax regime in respect of tobacco and alcohol had ended successfully.

Finance Secretary, Cesar V. Purisima, said in a statement that the government had succeeded in working with industry “vested interests” for the benefit of the country.

“The passage of the excise tax reform on tobacco and alcohol marks a historic victory for health and revenue reform in thePhilippines, Purisima said. “We congratulate our partners at the Bicameral Conference Committee for passing the excise tax reform bill.”

Others were less than sanguine, however. According to The Philippine Star story, Zambales Representative, Mitos Magsaysay, said the proposed law on higher sin taxes would hurt tobacco farmers.

“The tax increase for tobacco products will be at least 1,000 per cent by 2017,” she said. “This is ridiculous. I have never seen this kind of tax increase in my entire career as a lawmaker…

“There are 2.9 million Filipinos dependent on the tobacco industry. If we increase the taxes excessively, they will lose their livelihood. Without any income, our tobacco farmers and their families will starve to death. Are we really willing to do this?” Magsaysay asked.

And Bayan Muna Representative, Neri Colmenares, said the approved bill was a regressive, anti-Filipino form of taxation that favored imports over local brands and jeopardized the job security of small farmers and workers in the tobacco and alcohol industries.