‘Sin tax’ income might to go to ‘wrong hands’

THE House minority bloc has raised reservations on proposals to raise sin tax rates, fearing that the additional revenues would not reach its intended beneficiaries – the government agencies for social services like health and education.

Deputy Minority Leader Rep. Carlos Padilla (Nueva Vizcaya) said the proposed legislations do not carry “guarantee” or safeguards that the proposed beneficiaries would actually get the proceeds once the law is implemented.

“My worry is that, what is the guarantee that the revenues generated will really go to the intended purposes of the proposals. Assuming we raise P1 billion, what is the guarantee this will go to the information communication technology program of public schools?,” Padilla said during the previous hearing of the House ways and means committee.

Padilla said the committee should invite officials of the Department of Budget and Management (DBM) to explain more on the development projects of the government that are being funded through collected taxes.

He noted that based on experience, a law’s beneficiaries are left out once the actual proceeds start coming in.

Ilocos Sur Rep. Eric Singson Jr. echoed Padilla’s concern saying that if the government meant to stifle the tobacco industry by raising the excise taxes, then it should not expect generous revenue in the long term.

Based on the Bureau of Internal Revenue report, Singson said each time there is an increase in tobacco taxes, there is a steady decrease in revenue, making such taxes inflationary.

Lower sin tax revenues would translate to fewer funds pouring into social services as promised by the proponents seeking to raise sin taxes.

One of four pending excise tax proposals in Congress, House Bill 2484 filed by Rep. Erico Aumentado (Bohol) seeks an additional tax of P10 on alcohol products to generate funds for the ICT program of public elementary and secondary schools and construction of new school buildings, hiring of new teachers preferably with ICT proficiency, English, Math and Science Majors.

Another proposal HB 2485 seeks to provide for an additional tax of P3 per pack of cigar and cigarettes to generate funds for the PhilHealth universal coverage of indigent families, barangay officials, health and day care workers.

Aumentado said the government stands to generate at least P6 billion to P7 billion a year from the twin measures.

The House ways and means panel has deferred more hearings to give more time to affected stakeholders like the tobacco and liquor players to study the proposed measures.  Dino Ng

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