Press Release
November 5, 2012


Senator Edgardo J. Angara today stressed that any excise tax resulting from deliberations on the sin tax bill should be equitable and take into consideration the interests of all the affected stakeholders.

Angara, a member of the Senate Committee on Ways and Means said, "We ought to look at the allocation of burden. Where will the incidence of the taxation rest? The sin tax should be equitable. We should weigh the issues between smokers and farmers, in the case of cigarettes, and make sure that we do not tax foreign-branded liquor indiscriminately given that we are part of the World Trade Organization [WTO]."

Amendments to the sin tax bill were drafted to generate additional revenues, which will be utilized for healthcare, and discourage people from using tobacco and alcohol products.

According to Senator Miriam Santiago's and the Department of Finance's (DOF) proposal, sin tax revenues for the first year of implementation will amount to P60 billion while Senator Ralph Recto's Committee Report projected at least P15 billion in initial collections.

Angara, who is also the Vice Chair of the Committee on Finance explained, "I believe P60 billion is unrealistic, given that it is roughly more than the combined profits of the industry for three years. We do not want to overtax the industry and destroy it."

The veteran lawmaker then explained that deliberations in the Senate should start with Committee Report No. 411 so that there will be no need to go back to the start and assemble a new committee report.

"From there, we move on and find the tax level that will satisfy health and revenue expectations. For me, P30 to P40 billion is the sweet spot--that is my calculation of what could be acceptable. There is a level where we can raise government revenues for healthcare while still able to preserve livelihood."

Angara emphasized that it would be best for deliberations on the bill to be finalized before the approval of the 2013 budget because the projected proceeds will be factored in.

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