Press release – Action for Economic Reforms – 21 November 2012

Civil society and health advocates commended last night’s passage of the sin tax bill in the Senate.

In a press conference in Quezon City, Dr. Antonio Dans of the UP College of Medicine stated, “I would consider that a major health victory from any point of view.”

“This is not our first sin tax bill, but it is our first substantial sin tax bill,” said Dans. “The previous ones I consider as cop-outs and these were protecting the industry rather than the health of the people.”

Jo-Ann Latuja, senior economist of Action for Economic Reforms (AER), lauded acting chair Senator Franklin Drilon, saying, “Despite the attempts to water down the bill, we are very grateful for Senator Drilon’s success and being able to pull the tax rates up. Instead of P22 [per pack at a unitary rate], it became P26.”

She said that the Senate version was able to secure the following reforms:

1.      1. Removal of the price classification freeze

2.      2. Unitary tax rate for cigarettes of P26 by 2017

3.      3. Annual tax increases of no less than 4%

4.      4. Higher tax rates for alcohol

5.      Earmarking of funds for universal health care and tobacco farmers and workers

However, Latuja added that they would still look into the details of earmarking that were amended by Senator Ralph Recto, as his amendments “complicated earmarking.”

AER coordinator Filomeno Sta. Ana III pointed out that the fight for sin tax is not yet over. He said, “We are fighting three wars. We won in the Lower House and Senate and we have to win in the Bicameral Conference Committee.”

Sta. Ana said that the Bicameral meetings were historically “shrouded in secrecy” and this was when politicians would insert “killer amendments” such as the price classification freeze, which kept cigarettes at their 1996 rates.

Sta. Ana urged: “We want an improvement of both the House and Senate bills. Any change in the consolidated bill should not deviate from what was already approved and instead, should incorporate the best features in both bills.”

He cited an example where the Senate version’s unitary rate can reconcile with the House version’s highest tax rate of P30 and said, “This means we can still push for higher tax rate anchored on a unitary tax system.”

Sta. Ana stressed that legislators who sided with the industry should be excluded from the Bicameral meeting, saying, “They don’t care about the health and lives of our Filipino people.”

He pointed out that Senator Ralph Recto previously copied the Philip Morris proposal for his committee report while Senator Bongbong Marcos was seen closely interacting with Philip Morris Fortune Tobacco (PMFTC) lawyers during his interpellation and yesterday’s computations for revenue estimates.