PHL fiscal authorities say HB 5727 reflects political will

Philippines fiscal authorities on Thursday urged the Senate to pass the sin tax bill after the House of Representatives approved the landmark legislation Wednesday night.

 

The passage of House BIll 5727, authored by Cavite Rep. Joseph Abaya, is a reflection of the strong political will of the Aquino administration, said Finance Secretary Cesar Purisima.

 

“The passage of House Bill 5727 at the Lower House signifies the political will of this administration to institute needed reforms that shall help us achieve macroeconomic stability and fiscal sustainability,” the Finance chief said.

 

“I thank the House of Representatives for working double-time to secure the passage of this bill, vital for its potential contribution not only to state revenues, but more importantly to promoting healthy lifestyle to Filipinos,” Purisima added.

 

“Moving forward, we call on our dear senators to ensure the passage of HB 5727 into law within the year, keeping in mind the welfare of the Filipino people,” he said.

 

Budget and Management Secretary Florencio Abad described the approval of a new sin tax measure as a groundbreaking. “We are much closer to reforming the current tax regime for tobacco and alcohol products, which has been in place for more than fifteen years and has proven ineffective and outdated.”

 

HB 5727 is expected to translate to P33 billion in additional revenues. At least 85 percent of the revenues would go to health services, including health coverage for indigents and the informal sector under the National Health Insurance Program.

 

Abad said 15 percent would go to support tobacco farmers who may be adversely affected by the measure.

 

"Tobacco- and non-tobacco growing provinces will likewise have a share in the revenues generated by an updated excise tax regime,” he said.

 

Bureau of Internal Revenue Commissioner Kim Henares said the new measure corrected a flawed system. “It corrected a structure that was flawed from the very beginning,” Henares told reporters.

 

British American Tobacco (BAT), which returned to the Philippines early this year after leaving the country in 2009, welcomed the approval of the measure, saying it gives new players a chance to compete in the local market.

 

“The current system has been in place now for [about] sixteen years. It has benefited only a few industry players led by a monopoly but has not served the interests of the Philippine government, the general public, and new players like us who wished to invest and create new jobs,” said BAT general manager James Lafferty.

 

“HB 5727 seeks to finally end that. We hope that a similar measure gets passed in the Senate,” Lafferty added. 

 

The cigarette industry is dominated by PMFTC, the merged entity of Philip Morris and Fortune Tobacco Corp. which controls 94 percent of the market. —VS, GMA News