Health groups decry lawmakers’ attempt to rush bill that would kill Sin Tax Law

MANILA — Various health groups have assailed lawmakers who support a bill that could kill the health and revenue gains of the Sin Tax Law.

“The legislators chose to protect the interest of the tobacco industry, a long-standing clique of power in Congress, known to most as the Northern Luzon Alliance. They struck again with decisive force to ram through legislation a proposal that will kill the health and revenue gains of the Sin Tax Law,” the groups pointed out in a statement issued Wednesday.

“They are trying to beat the Christmas rush and hoping to deliver the goods to their master, in this case, the tobacco companies, as soon as possible. The Christmas ‘aguinaldo’ for a job well done may be forthcoming for these legislators. Thanks to a bill that will surely bring more profit to the tobacco companies’ coffers as more people die because of smoking-related diseases.”

The health groups consist of the Primary Care Coalition, Action on Smoking and Health (ASH), Framework Convention on Tobacco Control Alliance Philippines (FCAP), New Vois Association of the Philippines, Health Justice Philippines, Womanhealth Philippines, and Action for Economic Reforms (AER), which are strongly opposing the rush to pass Bill 4144 at the House of Representatives.

Authored by ABS Partylist Rep. Eugene Michael de Vera, House Bill 4144 seeks to introduce two tax tiers — the first at PHP32 per pack for low-priced cigarettes, and the second at PHP36 per pack for high-priced cigarettes. It also seeks an annual increase of 5 percent on these rates. Republic Act 10351 sets the sin tax on tobacco at PHP30 per pack in 2017, with an annual 4 percent adjustment afterwards.

The bill was filed last Oct. 19, shortly before the session went on a break on October 21. It was referred to the House committee on ways and means on Nov. 7 when the session resumed and was discussed by the committee during its first hearing on November 28.

The bill was approved without amendment during the second hearing on Dec. 5 and submitted to the committee on rules on the same day.

“Deliberation started the following day and could have been approved without the timely intervention of pro-health advocates among the members of the House. We are alarmed that Congress leaders are bent on getting this passed today,” said Dr. Maricar Limpin, ASH executive director.

Limpin said that known members of the Northern Luzon Alliance are key leaders of the House, led by Majority Floor Leader Rep. Rodolfo Fariñas with Ilocos Sur Rep. Eric Singson, and Quezon City Rep. Bingbong Crisologo. Ways and means committee chair Rep. Dakila Cua is from Quirino province and purportedly also a member of this bloc.

“These legislators tried to stall opposition to HB 4144 of pro-health legislators,” Limpin said.

Rep. Pia Cayetano, Rep. Edcel Lagman, and Rep. Josy Limkaichong raised the health impact of the bill, saying the measure should be discussed lengthily before it is passed.

Another bill was filed by Albay Rep. Joey Salceda, HB 4575 on Dec. 5 to maintain the single tax rate on cigarettes at PHP40 per pack as a counter-measure to the bill adopted by the ways and means committee.

In Salceda’s explanatory note on HB 4575, he called the two-tier tax a bad policy because the poorest 1 percent of Filipinos spends 4.7 percent of their income on tobacco.

Salceda argued that imposing a lower tax on low-priced cigarette products that the poor consume will encourage them to smoke further.

“We rally behind Rep. Salceda’s proposal because it builds on the intent of the Sin Tax Law. HB 4575 will be effective in encouraging more smokers to quit and discourage vulnerable sectors, such as the youth and the poor, from smoking,” said Dr. Antonio Dans, academician of the National Academy of Science and Technology.

Dans estimated that at least 10 percent of smokers would simply switch to low-priced cigarettes if HB 4144 is adopted. He said instead of quitting, smokers could end up consuming up to 50 percent more of the cheap cigarettes.

AER president, Cristina Morales-Alikpala, warned that a two-tier tax system would make it easy for tobacco manufacturers to produce cheap brands to avoid higher taxes.

“A higher unitary tax rate will protect and save more lives, and significantly reduce downshifting to cheaper brands. HB 4144 will be bad for both health and revenues while HB 4575 will further strengthen the Sin Tax Law; HB 4575 is estimated to generate PHP20 billion more revenues compared to HB 4144,” Alikpala explained.

The Sin Tax Law stipulates a scheduled shift from the current two-tier to a unitary tax system effective January 1, 2017. “With barely a month before the excise tax on cigarettes unify, we are wary that the passage of HB 4144 is being rushed to block the unitary tax system in favor of vested interests,” said Limpin.

Republic Act 10351, more popularly known as the Sin Tax Law, was signed by former president Benigno Aquino III on Dec. 20, 2012, after being stalled at the committee level in the Senate and the House for more than 15 years. The measure has been repeatedly hailed internationally and dubbed as “the single most important health policy legislation of the past decade” in the Philippines.