Mixed Reactions On House OK of 'Sin' Tax Measure

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Mixed Reactions On House OK of 'Sin' Tax Measure
News - June 08, 2012
By: Kim Arveen M. Patria

The House of Representatives approval of the “sin” tax reform bill was met with mixed reactions from the business community, with some welcoming the revenue measure and others claiming it was discriminatory.  

"[W]e do welcome continuing progress towards crafting a sin tax bill that will generate more revenues, particularly for the government’s health program," Makati Business Club (MBC) Executive Director Peter Angelo V. Perfecto said in a text message.

The House on Wednesday voted 201-21-5 in favor of passing House Bill (HB) 5727, which aims to increase excise taxes on "sin" products made from alcohol and tobacco. It includes provisions on allocating a portion of revenues to the state health care program.

It is seen to raise P31.35 billion in additional revenues and its enactment into law -- likely later this year as the Senate version still has to clear the committee level -- has been also been cited as a consideration for a credit rating upgrade.

Finance Secretary Cesar V. Purisima yesterday urged senators to approve the same bill. "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 in a statement. "The passage of HB 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.

"With the 15th Congress having ended its second regular session yesterday, any progress on the bill will come after July 23 when the third and final session starts.

Commenting on the House approval, John D. Forbes, legislative committee chairman of the American Chamber of Commerce of the Philippines, noted that the bill passage had been recommended by the Joint Foreign Chambers of the Philippines (JFC).

But Hubert d’Aboville, president of the European Chamber of Commerce of the Philippines, a JFC member, said: "We cannot be satisfied with the approval of the amended version of the bill because it is not compliant with the WTO ruling."

The Philippines last year lost a World Trade Organization case filed by the European Union and the United States, which claimed the excise tax regime discriminated against imported liquor.

The approved bill, which will scale excise taxes to two tiers for tobacco and three for alcohol, will still raise prices of imported liquor, Mr. d’Aboville said. He added that his group backed the original version of the bill which proposed a unitary tax scheme. "We are still hoping that the provisions in the original bill will resurface in the bicameral conference committee," he said, referring to the penultimate legislation step that reconciles the House and Senate versions of a proposed law.

House ways and means committee chairman Rep. Isidro T. Ungab, however, said the approved bill addressed WTO issues. "[Taxes] will be based on the net retail price now," he said via text. -- Kim Arveen A. Patria with K. A. Martin

 

Source: Business Mirror; Front Page; 8 June 2012

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