NOV.

18, 2012

NR # 2927C

Solons urge senators to put off voting on sin tax bill & further study proposal
As the Senate prepares to vote on the sin tax reform bill, two party-list lawmakers urged senators to put off plenary voting on the measure and devote more time to further study the tax proposal which the congressmen described as anti-poor, regressive and a big threat to the livelihood of tobacco farmers. Gabriela Party-list Rep. Luzviminda Ilagan urged senators to devote more time to study the sin tax bill and weigh its pros and cons. We hope they will not vote on the sin tax bill and instead opt to further study the proposal. We urge senators to continue debating and discussing the bill so they can weigh its pros and cons, and most of all, address the concerns of the sectors which will be most affected, and these are the poor. Its not really the rich who will be mostly affected. Were not taxing the rich here, said Ilagan. She said it was lamentable the sin tax bill is being pushed by the administration without sufficient debates and discussion on the important issues. Ilagan said Gabriela has been opposing the sin tax bill because it deems the measure regressive. The justification of the bill that its passage would stop or lessen smoking or drinking, that will not happen, because the moment people are addicted to smoking or drinking, no amount of legislation could lessen that. And if you increase the tax rates, only the poor will be affected, because the rich will say we can afford it so they will continue drinking and smoking just the same. It will be the poor who will really suffer because they will be burdened with additional tax, said Ilagan. Another reason for Gabrielas opposition is the difficulty in implementing a new sin tax law. Why rely on the sin tax to provide funding to an agency that gives basic services on health? So with or without the sin tax, we should give sufficient funding to the Department of Health. The third reason for their opposition is the sin tax bills adverse impact on the livelihood of tobacco farmers. The tobacco farmers will be adversely affected and they already expressed their opposition to the sin tax bill, said Ilagan. During the June 6 voting on the amended House Bill 5727 wherein she cast a negative vote, Ilagan said the sin tax reform bill is regressive tax system and structure which the government was already implementing. She stressed the sin tax bill was more sinful than the sin products it would derive revenues from. She said the people are now overtaxed, hence there is no need for another tax burden. Anakpawis Party-list Rep. Rafael Mariano urged senators to reject the sin tax bill because the government can adopt alternative ways to generate additional revenues for its health

programs instead of raising the excise taxes on cigarettes and alcohol that would adversely affect the livelihood of tobacco farmers and growers. The government should improve and raise its revenue collection efficiency and reduce its fiscal incentives which mostly benefit foreign capitalists. In other words, you should make the taxation system progressive. The government should also cut its payment for automatic debt servicing. The problem now is that our national budget has distorted priorities. This year, interest payment alone for the national government debts amount to P333 billion, which will go up to P333.9 billion next year. If these measures are adopted, then government will effectively generate more revenues, said Mariano. He said the sin tax bill violates Section 28(1), Article VI of the 1987 Constitution which states that the rule of taxation shall be uniform and equitable and that Congress shall evolve a progressive system of taxation. He further said the P31.3 billion revenue target of the House sin tax bill and the P40 billion of the Senate bill are but a miniscule portion of the P333 billion allotment to debt service interest payments. Mariano stressed they are not against the health aspect of the sin tax bill itself. There is no question about providing more funds to our health needs or programs, in fact that should be a priority. But he noted the health budget and health services were still inadequate despite the provision of Republic Act. 8240 to use incremental revenues to finance a universal health care program. It is doubtful that revenues collected from higher excise taxes would be used for public benefit according to him. Mariano further said any revenue that would be derived from the passage of the sin tax bill would not benefit the farmers and workers. If the government really wants to help the farmers, the agriculture sector should be given priority when it comes to budget allocations according to him. 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), RVAT and other regressive taxes, will not have a trickle down effect on the public, he said. He said excise tax collections do not even go directly to tobacco farmers. These are coursed through the LGUs. I have even filed a resolution to inquire how much has been the excise tax collection of the government. (30) rbb