Prepare for sin taxes now, says Former National Treasurer

Press release – Action for Economic Reforms – 7 November 2012

Former National Treasurer Leonor Briones advised concerned government branches to prepare for the impact of sin taxes as early as now.

“We should not wait for the bill’s passage to act,” stated Briones. “An increase in taxes on tobacco and alcohol will have a large impact on certain sectors and we need to be responsive to their needs.”

She emphasized the strategic position of Senator Franklin Drilon as chair of both the Ways and Means and Finance committees, saying, “Urgent reforms such as this require early intervention. Senator Drilon is in a pivotal position to champion both the sin tax and the 2013 budget.”

“Early intervention assures the Filipino people of the measure’s sincerity to protect all stakeholders,” she added.

Briones explained that concerned government agencies such as the Department of Health (DOH), Department of Agriculture (DA), Department of Labor and Employment (DOLE), and the Department of Finance-Bureau of Customs (BOC) should enact special programs to mitigate the impact of increased taxes.

In the case of DOH, Briones proposed a new budget appropriation item to support indigent families of the 13 tobacco producing regions for non-communicable diseases related to tobacco and alcohol.

For DA, Briones put forward a development of the crops sector, ensuring that those affected are “prepared to make the transition and shift to other products and livelihoods.” This included a National Corn Program and a National High Value Commercial Crops Program focused on the 2 most affected regions (Regions I and II) and other 11 tobacco-growing regions.

For DOLE, a Promotion of Rural and Emergency Employment Program was proposed, which included training andlivelihood enterprise development programs for rural workers as well as programs for emergency employment of displaced workers.

Briones said, “Concerns about an increase in smuggling should be addressed by a program specifically focused on tobacco and alcohol smuggling.”

She recommended that Customs administration should include maintenance of security within custom zones, additional equipment and communication systems, and the prevention or apprehension of smuggled goods out of customs premises. She also emphasized that there be international cooperation with countries that successfully controlled smuggling.

Briones added that there should be an inter-agency committee composed of the DOH, DA, DOLE, and the BOC to develop programs to protect farmers and workers who might be affected.

“We propose a minimum of P50 million to finance feasibility studies and to develop alternative programs and consultations with affected sectors,” said Briones.

Overall, the proposal for mitigation of impact totaled to roughly P6.9 billion.

“If there is any institution with the power to address the problems, it is the government,” declared Briones. “The Sin Tax bill is a long-awaited measure that finally gives priority to health. Its proper implementation should be given the utmost priority as well.”

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