Recto wants lower rates for tobacco?

Advocates of the sin tax bill expect the measure to be diluted further when the Senate comes out with its committee report on the bill in October. Health Secretary Enrique Ona and Finance Secretary Cesar Purisima met with Senate ways and means committee chair Ralph Recto on September 18 in a bid to persuade him about the benefits of the bill, a source, who belongs to an organization working with the Finance and Health departments in pushing for the bill, told Rappler.

But Recto, who earlier expressed misgivings about the “high” taxes that will be imposed especially on tobacco, seemed to be unconvinced. Recto reportedly wants a 3-tier excise tax system for cigarettes, diluting the 2-tier provided in the bill passed by the House of Representatives in June. Apart from this, Recto also reportedly wants lower rates imposed on the tiers.

The tiers – for low-priced, medium-priced and high-priced cigarettes – will have tax rates of P3.50, P8.50 and P12.50, said the source. The rates are close to what were provided in the bill Representative Victor Ortega of the tobacco-growing province La Union earlier filed in the House. There is no word, however, on the tax structure for alcohol products. Authored by Cavite Rep Jun Abaya, approved House Bill 5727 seeks to raise at least P31 billion additional revenues from a 2-tier tax system for tobacco (with tax rates of P22 and P30) and 2 and 3 tiers for fermented liquor and distilled spirits.

The bill was a watered-down version of the one originally filed by Abaya that sought to raise P60 billion. In the Senate, Senator Miriam Defensor-Santiago filed bills, which carry the same provisions as the original Abaya bill in the House. The additional revenues from the sin tax measure will be used to fund the Aquino government's universal health care program and assist tobacco farmers in shifting to viable, alternative crops. The Senate held Thursday, September 20, its fourth and possibly, last public hearing on the measure.