Philippines House Starts Deliberations On Sin Taxes

by Mary Swire, Tax-News.com, Hong Kong

13 February 2009

The Philippine House of Representatives has announced that it has commenced its deliberations on a bill to increase sin taxes.

According to Danilo Suarez, author of House Bill (HB) 3759 which is proposing a unitary tax rate on cigarettes, aside from revenue collection, "the thrust of these measures on sin taxes is to discourage the youth from taking cigarette and liquors at the early age".

"Cigarette smoking has become a status symbol for the youth and is considered as a primary cause of respiratory illnesses resulting in financial burden on the government in terms of increased health assistance and subsidies to citizens", Suarez added.

Other measures on sin taxes being discussed by the House Committee on Ways and Means (chaired by Exequiel Javier), are:

• HB 2551 - increasing excise tax rates on alcohol and tobacco products, filed by Bienvenido M. Abante Jr;
• HB 3917 - increasing tax rates on cigars and cigarettes, by Jose G. Solis, and;
• HB 3787 - seeking to restructure the excise tax on alcohol products, also by Suarez.

The country's Finance Secretary Margarito B. Teves, who appeared before the House panel, has expressed support for the measures seeking to increase tax rates on cigarettes - particularly those authored by Suarez and Violago as these address the issue of restructuring tax rates.

"If tax rates are simpler, it would be easier to administer them, unlike the present system", Teves told the House committee.

Former BIR Commissioner Liwayway P. Vinzons-Chato, who also supported the bill, pointed out that a lot of taxes are not properly collected at present because of inefficiencies in the current tax collection system.

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