Beware of the tobacco monopoly’s ploy

Anything can happen, and anything is still possible. That’s the latest update as our lawmakers continue to hunker down in closed door sessions to reconcile two radically different versions that will affect the final draft of the sin tax law scheduled to be sent to P-Noy for signature this month.

In discussions ongoing between members of the two chambers of Congress, health advocates batting for a true reform in the sin tax bill cannot let their guard down especially now that the Philip Morris-Fortune Tobacco (PMFTC) monopoly controlling 97 percent of the market is desperately pulling all stops to gain the upper hand.

So far, it is the tobacco portion of the sin tax issue that continues to be highly controversial as the monopoly continues its darnest to keep alive and kicking the old provisions favoring its enormous profit-taking.

We’re talking here of the tobacco monopoly’s moves to significantly delay, even water down, the objective of unifying the taxation scheme on cigars and cigarettes by keeping the existing discriminatory cigarette classification system.

The monopoly is also attempting to obstruct the correction of a faulty tax table that has been in effect for the longest time, one that has deprived the government of the right amount of taxes.

Double kick

This has favored PMFTC with enormous revenues for over 16 years while giving Filipinos a double-kick. The monopoly has managed to keep its tax collections at low levels despite rising sales and profits. Meantime, amount of tax generated was definitely not enough to cover for the rising cost of health care in treating smoking-related illnesses.

This is a classic case of being fried in your own fat. And by keeping taxes at its current abnormally low levels, smoking prevalence in the country among the youth, the poor and even women continues to rise.

As more people are affected by debilitating sicknesses caused by smoking, the public health system is burdened by a bigger bill year after year. Per our doctors’ warnings, many chronic obstructive pulmonary diseases can be avoided simply by staying away from smoking.

This is unlikely to happen if cigarette prices continue to be at levels that are proposed in the Senate version of the proposed sin tax bill.

Unacceptable

As the bicameral committee meetings continue, there are a number of provisions that have become unacceptable. Simply by agreeing to them would be tantamount to risking the health and lives of our countrymen and future generations.

Let’s say no to retaining the multi-tier for four more years and a unified system only by 2017. This unacceptable position is basically embodied in Senate Bill 3299, a provision that clearly is the handiwork of the tobacco monopoly. Can we really afford to delay the wellness of Filipinos by another four years?

We should not agree to maintain the use of 1996 pricing as basis for classifying cigarettes for tax purposes. Let’s support the move to use net retail prices (NRP) as determined by the Bureau of Internal Revenue in its latest price survey.

Using the 1996 prices as basis for tax classification is not only devoid of logic considering the inflation since then but more important it is contrary to the spirit of reform that the administration is pushing.

Retaining this provision will only ensure lower rates for the brands owned by the tobacco monopoly of PMFTC. This will effectively continue the unfair and discriminatory advantage of the monopoly.

We should also not agree to dampen the tax rates and tax rate increases so much so that the final retail price of cigarettes will continue to be at the dirt-cheap levels that will make it affordable in sari-sari stores for elementary and high-school students to buy.

House Bill 5727 presents a more acceptable provision that would truly support what a sin tax law should be: pro health. HB 5727 calls for a tax of P28.30 next year and P30 in 2014. Every two years henceforth, the tax rate increase would be 8 percent.

Not just revenue generating

In the ongoing bicam deliberations, a 60:40 ratio in tax collection principle is being strongly espoused by SB 3299, with 60 percent coming from tobacco taxation, and 40 from liquors. Obviously, this scheme glosses over the fact that reforming the sin tax law is not just to generate revenues.

While the added tax collections will help shore up funding for our public health care system, specifically the administration’s universal health care program, what should be more important is the need to drastically reduce the health hazard that smoking and drinking brings.

Our lawmakers then should base taxation on the levels that will achieve the desired objective to keeping cigars and cigarettes away from people, most especially those who can ill-afford to treat diseases and illnesses that arise from such sin products.

Let us again be reminded by our wise doctors’ warnings. Every P1 tax hike on a pack of cigarettes saves 2,500 Filipinos from death.

Champions League 2012 National Collegiate Championship

This season-ending event, which will determine the best collegiate team for the year 2012, ends today at Ynares Sports Gym, Pasig City when Ateneo Blue Eagles and UST Growling Tigers collide for a winner-take-all third game in the championship series.

Both teams will be aiming for historic achievements. For the Blue Eagles, a win today would give the team its fourth national title to complement the five-peat UAAP crown attained this year.

For Pido Jarencio’s Growling Tigers, this will be their first national title for over a decade and would erase the sad memory of being eliminated in the first round of the national championship in 2007 after winning the UAAP title.

After today’s game, the M. V. Pangilinan Special Awards for excellent individual performance will be announced to include the Most Valuable Player in the Finals, Mythical team members, Best Coach, and Best Referee.

Watch the game live at Ynares Sports Gym, Pasig City or over Channel Studio 23 as ABS-CBN Sports covers the live action to be aired nationwide.

 Visit www.CollegiatechampionsLeague.net for more details.

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