Lawmaker seeks minimum price for cigarettes

MANILA, Philippines - A lawmaker seeks to fix a minimum price for cigarettes despite President Aquino’s opposition.

In a statement yesterday, Romblon Rep. Eleandro Jesus Madrona said his proposal would be good for  the government, the youth and poor Filipinos.

Last week in Myanmar, Aquino said he does not  favor the proposal.

Madrona said fixing a minimum price for cigarettes would be good for the government because it would result in increased value-added tax (VAT) collections.

He estimated that the additional VAT revenues would amount to P1.13 billion in the first year and P3.52 billion in the third year.

Madrona said the government could use the additional income for vital public services. It could also be used to grant millions of salaried workers tax relief, he added.

It would be similar to the proposed increase in the tax-free yearend bonus and incentives from P30,000 to P70,000, he said.

Madrona said his proposal would be good for the health of the youth and poor Filipinos as they would be denied access to cheap cigarettes.

Under his bill, the minimum price for cigarettes would be P38 per pack starting on Jan. 1, 2015. It would be increased to P44 and P51 in 2016 and 2017.

Madrona said his bill would also put an end to the problem of revenue agencies in identifying cigarette products resorting to smuggling and other fraudulent activities.

This increase in revenues is apparently the reason why Internal Revenue Commissioner Kim Henares is supporting the measure, he added.

Madrona said the Sin Tax Reform Law enacted two years ago has not reduced the 20 million Filipino smokers, who just shifted to low-priced brands.

He said these are still available due to the different tax rates the law had set for different groups of tobacco products based on their retail prices.

“Once the bill becomes a law, all tobacco producers will have no choice but to abandon the super low-priced market and level up their pricing,” he said.

Several colleagues of Madrona, including Deputy Speaker Sergio Apostol, and Representatives Magi Gunigundo of Valenzuela, Elpidio Barzaga Jr. of Cavite, and Reynaldo Umali of Mindoro have supported his proposal.

In the Senate, Sen. Juan Edgardo Angara has expressed his intention to support the proposed minimum price for cigarettes.