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House OKs 'sin taxes' that would more than double cigarette prices

June 6, 2012 8:01pm
(Updated 8:33 p.m.) Overcoming powerful industry lobbies, the House of Representatives on Wednesday night passed the so-called “sin tax” bill, which imposes higher taxes on tobacco and alcohol products.

The government expects to generate P33 billion in revenues after a year of this law’s implementation, in addition to drastically reducing the consumption of two of the country's leading killers. But the House bill will still have to be reconciled with the Senate version.
 
The lower chamber passed on third and final reading House Bill 5727, in a 210-21 vote with five abstentions.
 
Its final approval came right after the bill passed second reading in a viva voce vote. The passage of HB 5727 was expedited after President Benigno Aquino III last month certified the bill as urgent.
 
The bill was passed despite opposition from congressmen from northern Luzon, which produces most of the country’s tobacco. 
 
La Union Rep. Victor Ortega stood several times to propose final amendments to the bill, but was overruled by the majority of House members.
 
Making cigarettes, alcohol more expensive
 
HB 5727 seeks to increase the price per pack of cigarettes costing P11.50 to P23.50 during the first year of its implementation. Tobacco products costing P11.50 and above, meanwhile, will be sold for P31.80.
 
The following taxes, meanwhile, will be imposed on alcohol products during the first year of the legislation’s implementation:
  • P20 for distilled spirits (whiskey, brandy, rum, gin and vodka) worth less than P90
  • P80 for distilled spirits worth P90 to P150
  • P320 for distilled spirits worth P150 and above
  • P250 for wines worth P500 or less
  • P700 for wines worth more than P500
  • P13.75 for fermented liquor (beer, lager beer, ale, porter) worth P50.60 or less
  • P18.80 for fermented liquor worth more than P50.60.
The tax structure on alcohol reflects the individual product’s net retail price, and not necessarily based on packaging and content. 
 
The government expects to generate P33 billion in revenues after a year of this legislation’s implementation.
 
Last March, Cavite Rep. Joseph Emilio Abaya, the bill’s primary author, said the measure will not hurt tobacco farmers since 15 percent of the excise tax that will be collected through the proposed legislation will be “plowed back” to the farmers. 
 
With the bill now approved by the House, the Senate can either pass its own version or adopt HB 5727. After this, a bicameral conference committee will be convened to reconcile the respective versions of the House and the Senate.
 
A consolidated version of the bill will then be returned to the House and Senate after it has been approved by the bicameral committee.
 
It will then be submitted to Malacañang for the President's signature.  —VS/HS, GMA News



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