Cigarette rules not properly implemented

The national government should endeavor to enforce existing rules and regulations before considering new tax measure, like the indexation of excise taxes on tobacco and alcohol, a lawmaker from La Union said.

While the Department of Finance (DoF) wanted the proposed hike in levies on alcohol and tobacco be approved by the middle of next year, La Union Representative Victor Ortega pointed that the government has yet properly implemented the rules and regulations on cigarettes.

“What’s the use of passing new laws if we cannot strictly enforce existing rules and regulations like the ban on selling cigarettes to minors,” Ortega said.

But the finance department explained that there is a need to raise tobacco and alcohol taxes so that the industry is not controlled by just one company and to improve the government’s tax efficiency.

Currently, the company that controls 90 percent of the Philippine market is PMFTC, the merged entity of Philip Morris and Lucio Tan-owned Fortune Tobacco Corporation.

The finance department is also aiming to collect roughly P60 billion in additional revenues through the restructured excise taxes on alcohol and tobacco. Revenue from the measure would be earmarked for the government’s proposed public health care system.

Ortega, however, warned that an increase in taxes and the proposed attachment of graphic health warnings on cigarette packs may trigger tobacco farmers in the Ilocos Region to thinking about going back to marijuana planting.

“It took us a long, long time in the Ilocos Region to fight this marijuana planting. And we’ve gone a long way into minimizing it, except maybe in a few portions of the mountainous areas,” Ortega said.

According to government estimates, the sin tax measure could raise as much as P19 billion to P20 billion in the first year of implementation, P30 billion to P40 billion in the second year, P40 billion to P50 billion in the third year and P60 billion to P70 billion in the fourth year.

The sin tax hike measure is still being deliberated by the House ways and means committee.

Budget and Management Secretary Florencio B. Abad earlier said that delays in committee hearings and in the consolidation of the various “sin” tax bills had prompted the removal of committee chairman Batangas Rep. Hermilando I. Mandanas.

Newly instated ways and means committee chairman Davao City Rep. Isidro T. Ungab has said that he would prioritize and fast-track the passage of proposed excise tax reforms.