Partido Lakas ng Masa (PLM) opposes the proposed sin tax reform bill not because of its health provisions but because it is another form of regressive tax imposed on consumers, similar to the value-added tax (VAT). When the government imposed the expanded VAT in 2006, the argument was that it was needed to offset the country’s national budget deficit. Since then, the 12-percent VAT has been imposed especially on basic products, such as gas, electricity and water, which magnify the problem of high prices, and burden the poor.
Early this year, when gasoline prices soared to astronomical levels, transport and consumer groups demanded a reduction of the 12-percent VAT, but the government refused, saying that the taxes were needed for various “social programs.” Today, the government excuse is that the sin tax would generate around P60 billion yearly which could be used to fund the government’s “universal health program.”
The problem with this is that there is no such thing as a universal health program under the present administration. What we have is the PhilHealth insurance system which is funded by members’ contributions and which offers limited health coverage, sans medicine, for patients. The universal health care system as practiced in welfare-state societies in Europe, Cuba, Venezuela and Malaysia provide almost free health care, hospitalization and medicine for all citizens. This explains the term “universal” in health care.
The Aquino administration is also implementing a public-private partnership scheme which will privatize several public hospitals in the country, including the Philippine General Hospital and the National Orthopedic Hospital. Hence, there is reason to suspect that the government’s intent in imposing high consumption taxes on cigarettes and alcohol is not based on any comprehensive health program for the poor. The computation on the expected tax revenues alone proves that the additional tax is aimed not at cutting consumption, but at keeping it to a high level to meet a revenue target.
While we agree that the consumption of sin products should be curtailed, we do not believe that this could be done by inflicting more burdens on the consumer. It can best be done by raising corporate taxes and undertaking a massive information campaign against the evils of smoking and excessive drinking.
On this score, the government should investigate the failure of the Bureau of Internal Revenue to settle the tax evasion cases involving P1.2 trillion filed against tobacco and beer taipan Lucio Tan. A portion of this amount would be enough to fund the targeted 5 million new PhilHealth enrollees without any one of them paying a single centavo.
Lastly, if the government is really intent on merely penalizing the users of cigarettes and alcohol, we still can offer another compromise that is beneficial to all: Go ahead with the sin tax, but scrap the VAT first.
—SONNY MELENCIO, chairperson, Partido Lakas ng Masa (PLM), partidolakasngmasa@gmail.com