Sen. Drilon proposes P40-B sin tax bill

Senator Franklin M. Drilon on Tuesday introduced a substitute sin tax bill to restructure the excise tax for tobacco and alcohol products and raise P40 billion to P45 billion in additional revenues.   The measure is about three times more than the sin tax bill Sen. Ralph Recto proposed in a Senate ways and means committee report.   In his sponsorship speech, Drilon said his version of the sin tax bill mirror’s a “critical health reform measure” while Recto’s bill was a “fiscal reform package.”   “We are again at a pivotal moment… involving matters of public interest,” Drilon noted.   “The relevance of this measure is that it is the single-most important health reform measure in the past decade, which will impact 100 million Filipinos in the foreseeable future,” Drilon added.   The Senate then started the period of interpellation for the controversial sin tax measure.   Drilon’s proposed a unitary tax rate of P32 per pack. The rates for hand-packed cigarettes were modified from P7.56 per pack to P12 in 2013, P22 in 2014, and P28 in 2015.   “The incremental taxes from these amendments should generate an estimated P26.87 billion in the first year,” Drilon noted.   For distilled spirits, the Drilon proposed a mixed rate consisting of P30, plus 30 percent of the net retail price, which was expected to pull in an estimated P7.17 billion in the first year.   For fermented liquor, Drilon introduced a two-tier system: beer products with a net retail price below P22, will be taxed at P20 per bottle, and those above P22 will be taxed at P25 for additional revenues amounting of P12.5 billion.   “All in all, we expect to generate between P40 to P45 billion in incremental revenues on the first year when the reforms are set in place,” Drilon said.   Recto endorsed a sin tax bill that would yield at least P15 billion in additional revenues, or half of the P31.35 billion revenue indicated in the version approved by the House of Representatives, and a fourth of the Finance Department’s P60-billion target from the sin tax bill.   The bill Recto endorsed was peppered with criticisms and accusations – of favoring the tobacco industry – by fellow senators, the Aquino administration, health advocates and members of the civil groups, forcing him to resign as ways and means committee chair in his committee report.  — VS, GMA News