Like It Is
Time to vote, save lives
By Peter WallaceThere are posters put up downtown by some heartless monsters that say, “NO TO SIN TAX, JOBS NOT TAXES,” as it is “Anti-laborers, anti-farmers, anti-poor.”
There are posters put up downtown by some heartless monsters that say, “NO TO SIN TAX, JOBS NOT TAXES,” as it is “Anti-laborers, anti-farmers, anti-poor.”
I read only recently Senator Ralph Recto’s sponsorship speech on Senate Bill 3299, the Sin Tax bill, as reported out by the Committee on Ways and Means that he headed until recently, and I think he is unfairly being demonized by those who would mostly benefit from it. Finance Secretary Cesar Purisima, Health Secretary Enrique Ona, and Internal Revenue Commissioner Kim Henares criticized Recto for paring down the projected income from the very high taxes on cigarettes and liquor from P60 billion to only P15 billion. The combined pummeling forced Recto to resign the chairmanship of the committee. Sen. Franklin Drilon took over the position.
It was a lot to ask of the Filipino people: to flex our imaginative muscles and “imagine” a new order, a new way of life in Mindanao.
The watered-down sin tax bill Senator Ralph Recto revealed last week did not only propose a revenue goal on the low end of expectations; it represented a new low, period. Bandying fancy terms like “equilibrium,” Recto, the chair of the Senate committee on ways and means, deceived both the administration he is allied with and the people he is supposed to serve with a rationalization that only the tobacco companies could love.
Congress has before it 10 bills that I think must pass into law before sessions end in June next year if the Philippines is to truly progress. They are laws that this country needs if it is to break out of the morass of the past 40 years (or since martial law began a rot that has left the Philippines at the bottom of the Asean heap).
“It’s open war on Church, bishops say,” reads a headline in this newspaper, and so it should be. For 13 years the church has opposed this eminently sensible and desperately needed legislation.
The Philippines has scandalously low taxes on two commodities that have been proven killers of individuals, destroyers of families, and threats to national economic security: cigarettes and spirits.
Greed often makes the greedy ones blind to the repercussions of greed. We cannot find a better example of such greed and blindness as the proposed bill of Cavite Rep. Joseph Emilio Abaya, which would increase excise taxes on cigarettes and liquor by more than 1,000 percent. Supporters of the bill are easily blinded by the billions of pesos in additional revenue that higher sin taxes will bring to the government. They think that smuggling is a victimless crime, basically a law enforcement problem that simply deprives government of potential incomes.
The editorial “Equitable taxation” (Inquirer, 4/10/12) is spot-on, timely, and a matter that should be given much more importance by our legislators who are currently on recess.
Neal Cruz’s March 22 column on sin tax reforms and smuggling is laden with misconceptions and inaccuracies. First, the claim that high prices will not discourage consumption disregards the fundamental law of demand (i.e., as prices increase, demand falls). The same is true with cigarettes and alcohol: that a tax hike significantly lowers consumption has [...]
“It is better to tax bad things than good things,” asserts Nobel prize-winning economist Joseph Stiglitz. Pollution, he thus argues, should be taxed more than work. The rationale is simple: anything you tax will be done less. If you tax a bad practice like pollution, less of it will be done—and that would make all of us better off. On the other hand, taxing labor income (which most governments do) induces people to work less, thus produce less—and we all end up worse off, with less of the goods and services we enjoy.
The position taken by Gov. Chavit Singson favoring the Aquino administration’s “sin tax” reforms—as reported by Gil Cabacungan (“It’s Chavit Singson against the rest of the solid North on sin tax issue,” Inquirer, 3/9/12), and Jocelyn Uy (“Chavit now backs sin tax reform,” Inquirer, 3/6/12)—is backed by a sober analysis of the Philippine tobacco industry.
