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Monday, November 20, 2017

Gov’t revenues protected under existing sin tax law — Angara

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By Chino S. Leyco

Government revenue streams from tobacco products are already protected under the existing sin tax reform law, the Senate Ways and Means Committee chairman said.

MB File- Senator Sonny Angara

MB File- Senator Sonny Angara

Following the rapid passage of a bill seeking to keep the two-tiered rates on cigarettes, Senator Juan Edgardo M. Angara, Senate ways and means committee chairman, said House Bill 4144 is unlikely to be taken up in the upper chamber within this year.

Angara explained that Senators are not eager to approve the measure aiming to introduce amendments in the four-year old Republic Act 10351 or the Sin Tax Reform Act of 2012.

“Even if HB 4144 is not passed, there’s a built-in increase already [under the present tax structure for tobacco], so revenue side is taken care of,” Angara told reporters.

The lawmaker also said they will thoroughly study the House proposal and should undergo debates, but he clarified the Senates does not need to have a counterpart bill to HB 4144.

Finance Assistant Secretary and Spokesperson Paola A. Alvarez earlier expressed optimism that the Senate will be critical of HB 4144, adding the Department of Finance (DOF) will be battling it out better in the upper chamber.

The DOF and the Department of Health have strongly opposed HB 4144.

Finance Secretary Carlos G. Dominguez III had said that lawmakers should allow a unitary excise tax rate on cigarettes to proceed by January next year as provided by the Sin Tax Reform Law.

Under the Sin Tax Reform Law, it mandates the current two-tiered tax rate merge into a unitary tax rate of P30 per cigarette pack for all brands starting next year, and the rate indexed to inflation by increasing it to 4 percent annually.

Multinational tobacco companies PMFTC Inc., Japan Tobacco International (JTI), and British American Tobacco (BAT) supported the DOF on the unitary tax rate on cigarettes.

The World Bank, Philippine business groups, foreign business chambers, tobacco famers, along with local and international health advocates are also backing a unified rate for tobacco products.

Homegrown Mighty Corp., maker of low-priced cigarette brands, meanwhile, rejected a single levy system for tobacco products.

“Our position is to fully implement the law and let it run its course, including Section 11, which states that starting the third quarter of calendar year 2016, the Committee is mandated to review the impact of the tax rates provided under this Act,” Dominguez earlier said.

He described RA10351 as “a very good law,” adding it should be fully implemented and allowed to run its course.

Last week, the House of Representatives approved on third and final reading House Bill No. 4144 that seeks to amend R.A. 10351 by shifting to a two-tiered tax rate on cigarettes by January 2017, instead of a unified levy.

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