Sin tax bill a pro-poor measure, says former Treasurer

Press release – Action for Economic Reforms – 24 October 2012

Amid clashing views on the sin tax debates, University of the Philippines professor and former Treasurer Leonor Briones has voiced out her full support for the administration’s sin tax bill.

“This measure is an anti-poverty measure,” said Briones. “Contrary to popular belief, this bill is very much a pro-poor measure.”

Briones said that the sin tax bill, particularly Senator Miriam Defensor-Santiago’s version, would be an effective means to combat poverty.

“Tobacco consumption is inextricably linked with poverty,” she explained. “Evidence has shown that tobacco consumption is highest among those in the poorest households.”

Statistics from a 2008 study revealed that the poorest sector had the highest rate of smoking prevalence with a total of 39.9%. Particularly alarming was that 61% of men from lowest-income households were smokers.

Briones continued, “For them, money spent on tobacco products is money that could have been spent on basic necessities such as food, education, clothing and utilities.”

A 2003 study showed that the average tobacco expenditure of the poor and poorest households is 10 times that of what is spent on education and 13.5 times that of health.

“Tobacco consumption also contributes to poverty because smokers are at a high risk of falling ill and dying prematurely from tobacco-related diseases,” maintained Briones. “Not only are these families deprived of income but they bear the heavy burden of additional healthcare costs that they certainly could not afford.”

Briones reiterated the importance of the sin tax bill saying, “The passage of this bill means shielding the poor from the harms of smoking and the healthcare costs they would incur if they fell ill. Furthermore, the incremental revenue gained from the bill will go into healthcare that will benefit all Filipinos – not just the consumers.”

She added, “As an anti-poverty measure, we have to prepare the safety mechanisms mentioned in the reforms. Included in our proposal in the 2013 budget is P1.9 billion that will provide assistance to tobacco farmers and workers in the alcoholic drinks industry in shifting to alternative livelihoods.”

The proposed alternative budget also provides for the creation of an inter-agency body to oversee the transition to other forms of livelihood.

This body will be composed of the Department of Health, Department of Finance, Bureau of Internal Revenue, Bureau of Customs, and DOLE. Provision is made for enhancing the capacity of Bureau of Customs to curb smuggling.

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