Sin Tax Bill Philippines A Big Victory for ₱40 Billion

Sin tax Bill Philippines - Passed. Photo: Rappler.com

Voting 15-2, Senate OKs Sin Tax Bill

The Senate, voting 15-2, finally approved the controversial measure increasing excise taxes for cigarettes and alcohol products after senators intensely debated on the appropriate equal distribution of tax burden among the two so-called sin products.

Only two senators, Senators Joker Arroyo and Francis Escudero voted against the bill.

Those who cast a "yes" vote were

1. Senate President Juan Ponce Enrile
2. Senate President Pro Tempore Jinggoy Estrada
3. Senate Majority Leader Vicente Sotto III
4. Sen. Franklin Drilon
5. Gregorio Honasan II
6. Pia Cayetano
7. Lito Lapid
8. Aquilino Pimentel III
9. Ferdinand Marcos, Jr.
10. Teofisto Guingona, III
11. Loren Legarda,
12. Ramon Revilla Jr.
13. Manuel Villar
14. Ralph Recto
15. Panfilo Lacson.

Drilon, sponsor of the bill, and chair of the Ways and Means Committee, said the government stands to generate ₱40 billion in additional revenues with the passage of the measure.

THE UNIVERSITY of the Philippines Economics Towards Consciousness together with other UP school organizations hold a Sin Tax Consciousness Parade at the Diliman campus to inform fellow students about the advantages of passing the law.

Of the amount, ₱24 billion will come from increased taxes on tobacco, while ₱16 billion will be generated from taxes on fermented liquor and distilled spirits depending on its historical burden sharing.

Prior to the approval on third and final reading, Enrile demanded a re-computation of the multi-year tax burdens after seeing what he saw was a "distortion in the computation."

As approved in caucus, the aggregate sin tax collection target was pegged at ₱40-billion with a 60-40 percent burden sharing scheme which tobacco tax take was set at ₱24-billion and alcohol tax at ₱16-billion under the Senate version.

"After much negotiation, we have agreed on a three-tier system for taxes of cigarettes," Drilon said. "We have maintained a 60-40 burden sharing between cigarettes and alcohol. What are the totals that we expect to collect on a per year basis?"

Drilon enumerated them:

The total increment would be

• ₱39.5 billion; in 2013
• ₱45.7 billion; in 2014
• ₱52.3 billion; in 2015
• ₱57.7 billion; in 2016
• ₱64.4 billion in 2017

The rates will be as follows. For the lowest priced, the excise tax for efective next year per pack would be  

• 2013 will be ₱12.00
• 2014, ₱15.00
• 2015, ₱18.00
• 2016, ₱21.00
• 2017, ₱26.00.

On the medium priced cigarettes, the excise tax for 2013 will be ₱16.00; in 2014, ₱18.00; in 2015, ₱22.00; in 2016, ₱24.00; and in 2017, ₱26.00.  . For the highest priced, the excise tax for 2013 will be ₱20.00; in 2014, ₱21.00; in 2015, ₱22.00; in 2016, ₱24.00; and in 2017, ₱26.00.

Senate Bill No. 3299 otherwise known as "an Act Restructuring the Excise Tax on Alcohol and Tobacco Products" was adopted with 15 affirmative votes, two negative votes, and zero abstention.

 "The passage of this bill is monumental in the history of this chamber. Once again, amidst the differences in our views, we have proven that we care more about saving lives than generating revenues; and that we remain true to serving the nation above personal interest," said Drilon who went through tedious debates on the proposed measure.

President Aquino has certified the bill as urgent. (http://is.gd/wConSB)

Manila Bulletin 

Continue reading

FRANCE said Philippines must tax Text Messaging : Malacañang said NO WAY

No Tax On Text messaging in the Philippines. Photo: ticklethewire.com

No Tax On Text

MANILA, Philippines --- Mobile phone users should not fret about a purported looming tax on text messages for now after Malacañang appeared reluctant to consider such tax proposal made by the head of the International Monetary Fund (IMF).

Presidential spokesman Edwin Lacierda said yesterday the government is "preoccupied" with seeking the swift approval of the sin tax bill in Congress for the year.

Certified as urgent by President Benigno S. Aquino III, the sin tax measure seeks to generate at least P40 billion a year to help upgrade healthcare services in the country.

"We are presently preoccupied with the sin tax," Lacierda said in a Palace press briefing when asked if the Palace is open to impose tax on text messages.

"We have not discussed in the highest level on the text tax. That was not something that we have anticipated so we have no discussions on that," he said.

Asked if the sin tax bill will be the first and last tax proposal for the year, Lacierda said: "For this year, the sin tax measure is in the budget in terms of fiscal policies are concerned. That's the thing we are looking at right now."

Secretary Ramon Carandang of the Presidential Communications Development and Strategic Planning Office (PCDSPO) also frowned on the tax on text proposal by IMF to generate more revenues.

"Sin taxes should be "enough for now," Carandang said.

IMF chief Christine Lagarde earlier said the government can shore up revenues if mobile phone messages are taxed.

Lagarde, who visited Manila last week, said Vice President Jejomar Binay told her telephone coverage in the Philippines has reached 112 percent given the popularity of sending text messages. "This clearly satisfies one of the two criteria for what we call a good taxation," she said.

Meanwhile, Sen. Francis Escudero balked yesterday at the proposal to increase the tax on text messaging to boost government revenues which came at the heels of the IMF chief's visit to the Philippines.

Escudero, who chairs the Senate Committee on Justice and Human Rights, said he finds it inappropriate for an institution or any foreign entities to dictate on any other government like the Philippine government "what to and not to tax."

"The IMF and its chief has no business in even suggesting that we impose tax on text. The power to tax is inherent in Congress and any external intervention is already meddling with our sovereignty," Escudero said.

Lagarde, in a meeting with Malacanang officials, had also pushed for the passage of the sin tax bill which is now pending approval at the Senate, saying it would be a "great progress for the revenue collection of the country."

At the same venue, Lagarde suggested that telecommunication services are mines for new source of taxation because of its wide base of 102 million subscriptions.

She said if the government is keen on revving up its revenues, then telecommunication would satisfy those two criterias: text messaging and calls.

But Escudero said Lagarde's suggestion is skewed, if not so unfeeling, "granting that it has a place in our economic affairs."

"I strongly oppose this foreign meddling and even the idea behind it. Ms. Lagarde is better off making suggestions to her fellow Europeans who can perhaps learn a thing or two from us," he said.

Taxation, Escudero said, should be based on the ability of taxpayers to pay.

"Text messaging is so ingrained among the lower socio-economic strata with about 90 percent of mobile phone users have pre-paid lines. Instead of providing relief for the Filipino public, this twisted idea of taxing text is an additional burden to the masses," he pointed out.

Escudero said he would block any bill proposing for higher tax on text and calls when it reaches the Senate.

On the other hand, House Speaker Feliciano Belmonte, Jr. said he is open to the proposition made by the IMF chief.

"If at all, why not set our sights on taxing luxury goods such as motor vehicles and jewelry instead of taxing text messages?" Escudero said. (With a report from Hannah L. Torregoza) (http://is.gd/krr1NN)

Manila Bulletin 

Continue reading