‘Sin tax’ panel given two weeks to wrap up
THE technical working group (TWG) tasked by the House ways and means committee to consolidate all sin tax related legislations was given two weeks to wrap up its work.
Batangas Rep. Hermilando Mandanas, panel chair, said the two weeks would afford the TWG ample time to study, compare, and reconcile all four excise tax proposals pending in the committee.
He said upon completion of its study, the TWG will refer this to the committee for two or more meetings, after which the panel will vote on the proposal.
The TWG is composed of representatives from the Department of Finance (DOF), Bureau of Internal Revenue (BIR), National Tax Research Center (NTRC), Department of Health (DOH), Department of Education (DepEd), National Tobacco Administration (NTA), producers and manufacturers, consumers’ groups, tobacco farmers, the local government units especially tobacco-producing provinces, among others.
The four pending excise tax measures are:
House Bill 2484 authored by Bohol Rep. Erico Aumentado seeking to provide for an additional excise tax of 10% on alcohol products to generate funds for the information communication technology (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, and for other purposes;
House Bill 2485 also authored by Aumentado seeking 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 and for other purposes;
House Bill 2687 filed by Negros Oriental Representatives Jocelyn Limkaichong (, George Arnaiz and Pryde Henry Teves seeking to restructure the excise tax on alcohol and tobacco products; and
House Bill 3059 filed by Mandanas seeking to promote an equitable sharing of costs and benefits among all stakeholders, parties affected, involved, or in one way or another connected with the alcohol and tobacco industries.
The has BIR collected P20.6 billion of excise taxes from alcohol products, P24.4 billion from tobacco products, for a total of P44.8 billion for the year 2009.
In terms of excise tax ratio to total revenue collection of BIR, about six percent of total BIR collection is attributable to excise taxes on alcohol and tobacco products.
Perspective wise, the total collection from alcohol and tobacco products in 2003 comprised 7.9 % of the total BIR collection, of which 4.7 % came from tobacco products and 3.2% from alcohol products.
DOF Director Stela Montejo, meanwhile, said in the last hearing that based on historical data, the increase in tax rates decreases volume of removals but increases revenue collection.
She cited possible reasons for this: production as being practiced by the industry is frontloaded in the year prior to the effectivity of the tax increase; and the factor of elasticity, that consumption does not really decline by as much as the increase in the tax rates.
The House panel earlier deferred further hearings on the sin tax proposals to give more time to affected industry players to study the proposed legislations. Dino Ng