Archive for August 17, 2012

Sin tax law by Christmas?

Posted: August 17, 2012 in Bong Bong Marcos, Juan Ponce Enrile, lung cancer, National Tobacco Administration, Northern Luzon Alliance, sin taxes, smoking, Sumptuary taxes, tax indexation, tobacco farmers
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Ilocano farmer drying tobacco leaf while smoking a cigarette

A story written by Cathy Yamsuan and Kristine Alave published in today’s Philippine Daily Inquirer reports that the Senate intends to pass the bill raising taxes on cigarettes and alcoholic drinks before Christmas.  The measure was approved earlier by the House of Representatives.  The same report noted that legislators were worried that the proposed law will impact negatively on the incomes of tobacco farmers in their home provinces or districts in Northern Luzon.

Senators Juan Ponce Enrile and Bong Bong Marcos

Senate President Juan Ponce Enrile of Cagayan province and Senator Ferdinand Marcos Jr. of Ilocos Norte said  their principal concern is whether Malacañang’s plan to dramatically increase taxes on tobacco and liquor would discourage consumers from buying tobacco products sourced from Northern Luzon (see http://newsinfo.inquirer.net/251522/sin-tax-bill-by-christmas-recto) .

Senators Ponce Enrile and Bong Bong Marcos: HELLO!?

Tobacco farmers again sin tax increase (from GMA TV)

The very purpose of a sin tax is to discourage the consumption of certain products such as alcohol and cigarettes considered dangerous to one’s health.  If you and others in the Northern Luzon Alliance (on the Alliance, please read  https://bongmendoza.wordpress.com/2012/03/09/solid-north/ and https://bongmendoza.wordpress.com/2012/03/20/solid-again/) are balking at the 700% increase in taxes, you have yourselves to blame.  In the past, you (especially Enrile when he was a member of the House of Representatives) vigorously opposed efforts to amend the law and index the sin tax rate to inflation.  Since the rates remained stagnant since the mid-1990s, any meaningful proposal to raise taxes now will seem excessive.

Northern Luzon where most of the tobacco is grown

This poster came out after the death of Jo Ramos, daughter of former President Fidel Ramos, due to lung cancer

It just won’t do to endlessly pit the economic interests of Ilocano tobacco farmers and the health of cigarette smokers.  The way to go is to raise sin tax rates and provide alternative livelihood for tobacco farmers.  Towards this end, it is necessary to amend Republic Act 7171, which was originally intended to promote the development and cultivation of Virginia tobacco in several tobacco growing areas.  RA 7171 (Sec. 2.b) provides for  “L]ivelihood projects particularly the development of alternative farming system to enhance farmers’ income.”

The July 26 issue of Business World reported that the National Tobacco Administration (NTA) is preparing a P165-million agribusiness project to provide alternative livelihood for some 7,700 tobacco farmers in Northern Luzon (http://www.bworldonline.com/content.php?section=Economy&title=P165-M-alternative-livelihood-project-targets-tobacco-farmers&id=55865).

The numbers may seem paltry but we have to start somewhere.  Otherwise, we will have to keep up with the repeated whining  about the adverse impact of sin tax increases on the income of Ilocano tobacco farmers.

Wait a minute!  Last time I checked Senators Enrile and Marcos are senators of the Republic (smokers included) and not only of Northern Luzon.

Enrile and Marcos: you are senators of the Republic, not of Northern Luzon!