Senate urged to act swiftly on proposed amendments to cigarette tax bill

Senate urged to act swiftly on proposed amendments to cigarette tax bill

MANILA — An opposition lawmaker at the House of Representatives on Sunday called on the Senate to do their part and act swiftly on the passage of the proposed law amending the Sin Tax Reform Act in order to protect local tobacco farmers.

“I am hoping that our good senators will also do their part to protect the local tobacco farmers from unfair business practices favoring multinational companies by immediately deliberating and approving the proposed amendments to the Sin tax Reform Act,” House senior Deputy Minority Leader and Buhay Partylist Rep. Lito Atienza said.

Last December 13, the House of Representatives approved on third and final reading the proposed bill seeking to retain the present two-tier excise tax rate on tobacco products from going to the scheduled unitary tax system by January.

House Bill 4144 was approved through nominal voting with 176 votes, 30 against and 3 abstentions.

Filed by ABS party-list Rep. Eugene Michael de Vera, the proposed measure will amend Section 145 paragraph (c) of the National Internal Revenue Code.

Under the present set-up, cigarettes with a net retail price of PHP11.50 per pack are taxed PHP25 per pack; while those priced higher than PHP11.50 will be taxed PHP29 per pack.

This January, the system will shift to a unitary tax rate of PHP30 per pack regardless of retail price.

But under HB 4144, a pack of cigarette with a net retail price (excluding excise and value-added tax) of PHP11.50 will be taxed at PHP32; while a pack with a net retail price of more than PHP11.50 will be taxed at PHP36.

Atienza said he is pushing for the swift enactment of the proposed amendments because “the past Congress has failed to protect the country’s local tobacco industry for approving laws that only serve the interests of multinational companies selling imported and branded cigarettes.”

He said that local tobacco farmers are now on the verge of extinction after being the number one in the world before.

“Once upon a time, we were the number one cigar manufacturer, but we killed our own cigar industry by a series of measures which ostensibly would have helped them.

The cigar industry is now making a lot of money all over the world, but without the Philippine brands being able to compete,” the opposition lawmaker said.

“It is high time for Congress to pass the bill of de Vera to address the flaws of the Sin Tax Reform Act,” Atienza added.

Earlier, House Committee on Ways and Means chair Dakila Carlo Cua said that the proposed amendment to the Sin Tax Reform Act they approved was a balancing act of Congress.

“With HB 4144, we have taken into consideration the original objective of RA 10351, which proposed higher excise tax rates for tobacco products on one hand, and the livelihood of Filipino tobacco farmers on the other hand,” the Quirino lawmaker said.

In the meantime, De Vera said that his proposal to retain the present two-tier system will protect local tobacco farmers, especially from Northern Luzon, who would be displaced by the uniform excise tax rate.

He pointed out that a uniform tax rate would favor makers of high-prized cigarettes because the prize disparity between the high priced and low prized cigarettes would be minimal.

“Imbued by competition, cigarette manufacturers may also opt to import tobacco leaves instead of purchasing the locally grown tobacco leaves considering that tobacco leaves grown abroad are of better quality, thus diminishing the demand for tobacco leaves produced domestically especially for the lower grade tobacco types such as Grade D, E, F-1, F-2 and R. These lower classified leaves comprise 2 percent to 30 percent of the leaves in one single stalk of cigarette,” de Vera said.

Although coming from the opposition ranks, Atienza said he agreed with the wisdom of the proposal not to impose a unitary tax because a uniform rate would kill the livelihood of tobacco farmers in the country.

“That (unitary tax) would kill the local farmers immediately because they could not really compete. That is why I believe in the wisdom of the proposed amendments. While we promote the objectives of good health, we are at the same time increasing taxes,” Atienza said. PNA-northboundasia.com