Banal errs: Beneficiary of sin tax is government

We write to express our disappointment with Conrado Banal’s article (“Holding an empty brag,” Inquirer, 3/11/13) which is based on erroneous or inaccurate facts and premises. Banal claims that British American Tobacco (BAT) gets preferential treatment under the new law. Lest Inquirer readers be misinformed, there is one unassailable truth to the law: Everybody is treated fairly. The tax of the cigarette brand depends only on one factor, which is its price. If the brand’s net retail price is less than P11.50 per pack, the tax is P12 per pack. If the brand’s net retail price is more than P11.50, the tax is P25 per pack. It is as simple as that.

How anyone can look at it differently boggles the imagination. Indeed, the simple truth is that we should welcome the amendment of the old law, the same law which for 16 long years shortchanged the Philippine government by tens, if not hundreds, of billions of pesos, because the big industry players were protected from changes in the excise classification of their brands even if their prices have increased. In fact, the biggest beneficiary of the new Sin Tax Law is the government because the reforms will now enable it to collect what is rightfully due its coffers.

Banal also inaccurately depicts our promise to invest $200 million. Had he done a simple research with the Inquirer news department, he would have found out that our statements on the matter had been clear, consistent and simple: BAT plans to invest that amount if the excise reforms are put in place, and we confirmed such commitment when the Sin Tax Law was finally enacted.

BAT is a large company globally but very small in the Philippines. It is unfortunate that we now seem to be at the receiving end of a propaganda campaign, and that we are being falsely maligned. In reality, the government is the beneficiary of the excise reform which is long overdue.

—ROBERTO EUGENIO,

head of corporate and regulatory affairs,

British American Tobacco