The representatives were not moved from their original position that the proposed measure would kill the local tobacco industry as it will result in massive job losses, including the distillery sector.
“HB 5727 should not just be designed to raise revenues but also give local industries room to survive and let our workers make a decent living,” said Rep. Magi Gunigundo (Lakas) of Valenzuela City.
He said the drastic rise in taxes on liquor, approximately 1,000 percent, would trigger increases in the price of the product.
Outside the House compound, hundreds of workers staged a noisy demonstration as the House Ways and Means heard the Palace-backed bill authored by pro-administration Rep. Joseph Emilio Abaya (Liberal Party) of Cavite.
Finance Undersecretary Jeremias Paul Jr., Health Secretary Enrique Ona and Internal Revenue Commissioner Kim Henares appealed to the representatives to look into the revenue and public-health benefits of the measure.
They said the money that will be generated will finance various government projects, including those involving public health.
The government estimates that sin-tax collection will increase by P60.7 billion on the first year, P84.3 billion on the second year, P118.4 billion on the third year, P128.5 billion on the fourth year and P139.3 billion on the fifth year once the bill is passed.
But the three government officials failed to allay the fears of members of the committee and even those of the tobacco and alcohol industries over the bill’s effects on the two industries.
Olivia Limpe-Aw, president of the Distilled Spirits Association of the Philippines Inc. (DSAP), said the finance department’s move to collect more than P62 billion in revenue through the proposed measure, was unrealistic as “it will give relief to imported brands while taxing out of the market local products from which the agency intends to mainly collect.”
She said the bill was “regressive” as it will penalize local brands with more than 1,000-percent increase in tax on the third year, while imported brands will enjoy more than 1,500-percent decrease.
Limpe-Aw noted that the bill will milk distilled spirits with an excise tax of P150 per proof liter or more than 10 times the current P14.68.
On the other hand, imported premium brands will be gifted with a tax break and will only have to pay P42 per proof liter or more than 15 times less than the current P634.90.
“It’s difficult to comprehend why the government is pushing for a measure that could potentially kill local industries while favoring imported brands. This move will also negatively affect the entire local economy,” she said.
For his part, Rodel Atienza, PMFTC labor union president, said Abaya’s bill will have serious effects on farmers, delivery personnel, small businesses and even sari-sari stores.
“Cigarette prices will skyrocket, production will slow down thereby affecting farmers’ income. Factories will shut down thus affecting jobs and destroy the industry,” he warned.
(Rene Acosta)
