Press Release
November 20, 2012

Transcript of Ambush Interview of Senator Franklin M. Drilon
On the Passage of the Sin Tax Reform Bill

I am pleased to announce that we have passed on second and third the sin tax bill. After much negotiation, we have agreed on a three-tier system for taxes of cigarettes. We have maintained a 60-40 burden sharing between cigarettes and alcohol. What are the totals that we expect to collect on a per year basis? For 2013, the total increment would be P39.5 billion; in 2014, P45.7 billion; in 2015, P52.3 billion; in 2016, P57.7 billion; and in 2017, P64.4 billion. The rates will be as follows. For the lowest priced, the excise tax for 2013 will be P12.00 per pack; in 2014, P15.00; in 2015, P18.00; in 2016, P21.00; and in 2017, P26.00. On the medium priced cigarettes, the excise tax for 2013 will be P16.00; in 2014, P18.00; in 2015, P22.00; in 2016, P24.00; and in 2017, P26.00. . For the highest priced, the excise tax for 2013 will be P20.00; in 2014, P21.00; in 2015, P22.00; in 2016, P24.00; and in 2017, P26.00.

You will note that there will be a unitary rate of P26.00 at the start of fifth year, January 1, 2017. By large, we were able to pass the bill into third reading today. The targeted revenue of P40 billion per year is achieved; and the targeted burden sharing of 60-40 is maintained for 2013 to 2017.

We would have wanted P30.00, but the reality is that it is a collective body and we tried to get the vote of our colleagues and this is the sweet, if you want to call spot that we were able to find P26.00. of course, a higher unitary tax is desirable, but reality is that we have to submit this to the collective wisdom.

(Q: On the 5% increase after 2017) It becomes 4%. I am confident that we should be able to submit this sin tax reform bill before the year is over.

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