SMOKERS and foreign companies will carry the burden of higher cigarettes and alcohol taxes, according to Bureau of Internal Revenue Commissioner Kim Henares.

Henares made the assertion during a briefing on the proposed restructuring of excise taxes on alcohol and tobacco products or increasing of sin taxes—a measure that the Aquino administration hopes to generate at least P60 billion of revenues in its first year of implementation to fund the government’s universal health care coverage program.

Under the unitary tax system, both local and internationally manufactured cigarettes will be meted the same taxes. Specifically, cigarettes currently pegged P5 pesos and below will be meted P14 worth of tax from P2.72 (400 percent increase). Those priced P10 pesos and higher, on the other hand, will be slapped a P30 pesos tax from the current P28.30 (six percent hike).

Henares noted that the unitary tax scheme will fix the current very wrong system wherein different values of taxes are imposed on four cigarette classifications even if these cigarettes have the same price, thus obligating even those who don’t smoke to pay for the hazard that the smokers brought about.

“Regardless if the cigarette is local or imported, they have the same health effects like lung cancer. We should not burden those people who consciously take care of their body with the health cost of those who smoke,” Henares told the House Ways and Means panel.

Likewise, Henares argued that the hike in sin tax is designed to dissuade the poor from spending on such a vice which exposes them to various type of sickness.

“This [cigarette] is a harmful product. We have to protect the poor who are in the most vulnerable situation in this because if they get sick, they would not have enough money for treatment,” Henares pointed out.

Nothing to lose
The increased sin tax, Henares said, would have little effect on Filipino tobacco farmers since 93 percent of the tobacco market in the country are controlled by foreign companies since it is the foreigners who buys the tobacco leaves from Filipino farmers.

Henares underscored that the farmers can still continue to plant tobacco even after the implementation of hiked sin tax considering that the Philippines sports a big export tobacco market, tobacco can be used for other things other than cigarette and that the House Bill 5727 provides P4.5 billion for the tobacco farmers who will be affected by the measure, if there are any.

“Foreigners come here to earn. The least that the Philippine government could do is to make the most of the situation by getting revenues from this activity so that we would have fund for our health programs, especially for the poor,” Henares added.

Rep. Ryan Singson of Ilocos Sur, however, is not convinced considering that tobacco is the main source of livelihood in his province.

“We have a long dry season so our soil is perfect for tobacco. As such, it is not that easy to ask our farmers to plant other crops. If that was the case, we would have done this a long time ago,” Singson said in closing.