source: gmanetwork.com
One vote. That was all it took for the controversial sin tax bill to squeak through the Senate.
Voting 10-9, the Senate on Tuesday ratified the measure which seeks to increase the excise tax on alcohol and tobacco products.
Senate President Juan Ponce Enrile, Senate President Pro Tempore Jinggoy Estrada, Senate Majority Floor Leader Vicente Sotto III, Senators Joker Arroyo, Ralph Recto, Francis Escudero, Gregorio Honasan, Ramon Bong Revilla, and Bongbong Marcos voted against the ratification.
Those who approved the measure were Senators Edgardo Angara, Pia
Cayetano, Miriam Defensor-Santiago, Franklin Drilon, Panfilo Lacson,
Lito Lapid, Sergio Osmena III, Francis Pangilinan, Aquilino "Koko"
Pimentel III, and Antonio Trillanes IV.
Senators Loren Legarda, Manuel Villar, Teofisto Guingona III, and Alan Peter Cayetano were absent for the vote.
The Senate's approval came after a joint committee of the Senate and House of Representatives reconciled the conflicting provisions in their versions of the bill.
"After conducting three separate bicameral meetings, your bicameral conference committee has come up with a reconciled version, that in our opinion, best exemplifies the diverse interests involved in this measure while recognizing our common goal of looking after the welfare of our country," sin tax bill sponsor Sen. Franklin Drilon said during his speech on Tuesday.
Among the points that were reconciled were the total revenue target and the burden sharing between the tobacco and alcohol industries.
The compromise reached by the two chambers included the total excise tax collection of P33.96 billion for 2013, P42.82 billion for 2014, P50.63 billion for 2015, P56.86 billion for 2016, and P64.18 billion for 2017, or a total of P248.49 billion in five years.
On the other hand, the burden sharing between tobacco and alcohol industries will be 69-31 in 2013 instead of 60-40 as earlier proposed by the Senate and 87-13 by the House of Representatives.
As of this posting, the House of Representatives has yet to ratify the bill. Once both chambers have approved measure, it will only need President Benigno Aquino III's signature for it to be enacted into law.
Opposition
On Tuesday, several senators expressed their opposition to the reconciled version of the measure. Arroyo and Enrile specifically asked why the Senate lost its bid for a P40-billion revenue target.
Drilon admitted that the burden for tobacco was decreased by P150 million in the bicameral version, compared to the Senate's proposal.
However, he explained that this was the best compromise they could get with the members of the House of Representatives. "If we stuck with the Senate position there would have been no bicam report," Drilon said.
But he added that the amount had the nod of the Department of Finance (DOF) and Bureau of Internal Revenue (BIR). Earlier in the day, the agencies said they were "happy" with the final version of the sin tax bill even if it did not follow their proposed revenue target of P60 billion.
Recto had earlier proposed that funds be earmarked for displaced farmers and local hospitals.
But the bicam committee removed the provisions and instead, inserted one which stated:
"After deducting the allocations under Republic Act 7171 and Republic Act 8240, 80 percent of the remaining balance of the incremental revenue shall be allocated for universal healthcare under the National Health Insurance Program, the attainment of the Millennium Development Goals and health awareness campaign. Twenty percent shall be allocated nationwide based on political and district subdivisions for medical assistance and health enhancement facilities program, the annual requirements of which shall be determined by the Department of Health."
Arroyo, Angara, and Recto questioned the substitution. "Although it speaks of earmarking there are no absolute figures," said Arroyo.
"I noticed that there is not enough criteria for the allocation," added Angara.
But Drilon explained that since hospitals have different needs, the "best" they can do is to appropriate funds in terms of percentage.
Enrile also raised the issue of the possible increase in cigarette smuggling. He said that government agencies have been turning a blind eye on foreign cigarettes that are openly sold nationwide.
"[There are] some in Manila, some in Cebu, some in Iloilo, Bacolod, Cagayan de Oro, Davao, Zamboanga and why has not any BIR agent seen this, why?" he said. "[So] why are they imposing so much burden on [the] local industry when they are not collecting tax on [these] imported cigarettes?"
Drilon assured Enrile that the Finance Secretary has noted this concern, and that they have instituted a safeguard against this problem in the sin tax bill.
Marcos, meanwhile, said the bill has a flawed computation and an "unrealistic" tax collection target.
He also said that "little or nothing" was done to address the possible effect of the measure on the affected industries. "We were essentially told, take it or leave it. All this bill will do is destroy the tobacco industry and a large part of the alcohol industry," he said.
Recto, in explaining his vote, supported Marcos' sentiments.
"[The bill] turns a blind eye to job losses by deleting specific earmarks for unemployment benefits intended for displaced workers," he said.
"More so, it took away clear earmarking for health insurance of 5 million families and P10-billion worth of improvements in health facilities in the countryside, where access to health care is needed the most," he added.
But Drilon said Marcos' points had been raised and answered during the period of interpellation.
Tobacco products
Based on the measure, the excise tax to be collected on cigarettes effective Jan. 1, 2013, are as follows:
- an ad valorem tax equivalent to 20 percent of the net retail price (excluding the excise tax and the value-added tax) per cigar; and
- a specific tax of P5 per cigar (which shall be increased by four percent effective Jan. 1, 2014)
Meanwhile, the excise tax on hand-packed cigarettes shall be:
P12/pack (effective Jan. 1, 2013),
P15/pack (effective Jan. 1, 2014),
P18/pack (effective Jan. 1, 2015),
P21/pack (effective Jan. 1, 2016),
P30/pack (effective Jan. 1, 2017)
The excise tax imposed shall be increased by four percent every year effective Jan. 1, 2018.
On the other hand, the excise tax on machine-packed cigarettes with a net retail price (excluding the excise tax and value-added tax) of P11.50 and below shall be:
P12/pack (effective Jan. 1, 2013),
P17/pack (effective Jan. 1, 2014),
P21/pack (effective Jan. 1, 2015),
P25/pack (effective Jan. 1, 2016)
P30/pack (effective Jan. 1, 2017)
The excise tax on machine-packed cigarettes with a net retail price (excluding the excise tax and value-added tax) of more than P11.50 shall be:
P25/pack (effective Jan. 1, 2013) ,
P27/pack (effective Jan. 1, 2014)
P28/pack (effective Jan. 1, 2015)
P29/pack (effective Jan. 1, 2016)
P30/pack (effective Jan. 1, 2017)
The tax rates shall be increased by four percent every year effective Jan. 1, 2018.
Alcohol products
Distilled spirits shall have an ad valorem tax equivalent to 15 percent of the net retail price (excluding the excise tax and value-added tax) per proof liter and a specific tax of P20 per proof liter effective Jan. 1, 2013.
These products shall have an ad valorem tax equivalent to 20 percent of the net retail price per proof and a specific tax of P20 per proof liter effective Jan. 1, 2015.
The specific tax rate shall be increased by four percent every year effective Jan. 1, 2016.
Sparkling wines or champagnes with a volume of 750 ml and net retail price of P500 or less shall specifically have a tax of P250 while those more than P500 shall have a tax of P700 effective Jan. 1, 2013.
Still wines and carbonated wines with 14 percent or less alcohol shall have a tax of P30 while those with more than 14 percent but not more than 25 percent of alcohol shall have a tax of P60 also effective Jan. 1, 2013.
The tax rates to be imposed shall be increased by four percent every year effective Jan. 1, 2014.
On the other hand, the excise tax on fermented liquors (beer, lager beer, ale, porter and other liquors except tuba, basi, tapuy, etc) shall be the following:
Effective Jan. 1, 2013:
Senators Loren Legarda, Manuel Villar, Teofisto Guingona III, and Alan Peter Cayetano were absent for the vote.
The Senate's approval came after a joint committee of the Senate and House of Representatives reconciled the conflicting provisions in their versions of the bill.
"After conducting three separate bicameral meetings, your bicameral conference committee has come up with a reconciled version, that in our opinion, best exemplifies the diverse interests involved in this measure while recognizing our common goal of looking after the welfare of our country," sin tax bill sponsor Sen. Franklin Drilon said during his speech on Tuesday.
Among the points that were reconciled were the total revenue target and the burden sharing between the tobacco and alcohol industries.
The compromise reached by the two chambers included the total excise tax collection of P33.96 billion for 2013, P42.82 billion for 2014, P50.63 billion for 2015, P56.86 billion for 2016, and P64.18 billion for 2017, or a total of P248.49 billion in five years.
On the other hand, the burden sharing between tobacco and alcohol industries will be 69-31 in 2013 instead of 60-40 as earlier proposed by the Senate and 87-13 by the House of Representatives.
As of this posting, the House of Representatives has yet to ratify the bill. Once both chambers have approved measure, it will only need President Benigno Aquino III's signature for it to be enacted into law.
Opposition
On Tuesday, several senators expressed their opposition to the reconciled version of the measure. Arroyo and Enrile specifically asked why the Senate lost its bid for a P40-billion revenue target.
Drilon admitted that the burden for tobacco was decreased by P150 million in the bicameral version, compared to the Senate's proposal.
However, he explained that this was the best compromise they could get with the members of the House of Representatives. "If we stuck with the Senate position there would have been no bicam report," Drilon said.
But he added that the amount had the nod of the Department of Finance (DOF) and Bureau of Internal Revenue (BIR). Earlier in the day, the agencies said they were "happy" with the final version of the sin tax bill even if it did not follow their proposed revenue target of P60 billion.
Recto had earlier proposed that funds be earmarked for displaced farmers and local hospitals.
But the bicam committee removed the provisions and instead, inserted one which stated:
"After deducting the allocations under Republic Act 7171 and Republic Act 8240, 80 percent of the remaining balance of the incremental revenue shall be allocated for universal healthcare under the National Health Insurance Program, the attainment of the Millennium Development Goals and health awareness campaign. Twenty percent shall be allocated nationwide based on political and district subdivisions for medical assistance and health enhancement facilities program, the annual requirements of which shall be determined by the Department of Health."
Arroyo, Angara, and Recto questioned the substitution. "Although it speaks of earmarking there are no absolute figures," said Arroyo.
"I noticed that there is not enough criteria for the allocation," added Angara.
But Drilon explained that since hospitals have different needs, the "best" they can do is to appropriate funds in terms of percentage.
Enrile also raised the issue of the possible increase in cigarette smuggling. He said that government agencies have been turning a blind eye on foreign cigarettes that are openly sold nationwide.
"[There are] some in Manila, some in Cebu, some in Iloilo, Bacolod, Cagayan de Oro, Davao, Zamboanga and why has not any BIR agent seen this, why?" he said. "[So] why are they imposing so much burden on [the] local industry when they are not collecting tax on [these] imported cigarettes?"
Drilon assured Enrile that the Finance Secretary has noted this concern, and that they have instituted a safeguard against this problem in the sin tax bill.
Marcos, meanwhile, said the bill has a flawed computation and an "unrealistic" tax collection target.
He also said that "little or nothing" was done to address the possible effect of the measure on the affected industries. "We were essentially told, take it or leave it. All this bill will do is destroy the tobacco industry and a large part of the alcohol industry," he said.
Recto, in explaining his vote, supported Marcos' sentiments.
"[The bill] turns a blind eye to job losses by deleting specific earmarks for unemployment benefits intended for displaced workers," he said.
"More so, it took away clear earmarking for health insurance of 5 million families and P10-billion worth of improvements in health facilities in the countryside, where access to health care is needed the most," he added.
But Drilon said Marcos' points had been raised and answered during the period of interpellation.
Tobacco products
Based on the measure, the excise tax to be collected on cigarettes effective Jan. 1, 2013, are as follows:
- an ad valorem tax equivalent to 20 percent of the net retail price (excluding the excise tax and the value-added tax) per cigar; and
- a specific tax of P5 per cigar (which shall be increased by four percent effective Jan. 1, 2014)
Meanwhile, the excise tax on hand-packed cigarettes shall be:
P12/pack (effective Jan. 1, 2013),
P15/pack (effective Jan. 1, 2014),
P18/pack (effective Jan. 1, 2015),
P21/pack (effective Jan. 1, 2016),
P30/pack (effective Jan. 1, 2017)
The excise tax imposed shall be increased by four percent every year effective Jan. 1, 2018.
On the other hand, the excise tax on machine-packed cigarettes with a net retail price (excluding the excise tax and value-added tax) of P11.50 and below shall be:
P12/pack (effective Jan. 1, 2013),
P17/pack (effective Jan. 1, 2014),
P21/pack (effective Jan. 1, 2015),
P25/pack (effective Jan. 1, 2016)
P30/pack (effective Jan. 1, 2017)
The excise tax on machine-packed cigarettes with a net retail price (excluding the excise tax and value-added tax) of more than P11.50 shall be:
P25/pack (effective Jan. 1, 2013) ,
P27/pack (effective Jan. 1, 2014)
P28/pack (effective Jan. 1, 2015)
P29/pack (effective Jan. 1, 2016)
P30/pack (effective Jan. 1, 2017)
The tax rates shall be increased by four percent every year effective Jan. 1, 2018.
Alcohol products
Distilled spirits shall have an ad valorem tax equivalent to 15 percent of the net retail price (excluding the excise tax and value-added tax) per proof liter and a specific tax of P20 per proof liter effective Jan. 1, 2013.
These products shall have an ad valorem tax equivalent to 20 percent of the net retail price per proof and a specific tax of P20 per proof liter effective Jan. 1, 2015.
The specific tax rate shall be increased by four percent every year effective Jan. 1, 2016.
Sparkling wines or champagnes with a volume of 750 ml and net retail price of P500 or less shall specifically have a tax of P250 while those more than P500 shall have a tax of P700 effective Jan. 1, 2013.
Still wines and carbonated wines with 14 percent or less alcohol shall have a tax of P30 while those with more than 14 percent but not more than 25 percent of alcohol shall have a tax of P60 also effective Jan. 1, 2013.
The tax rates to be imposed shall be increased by four percent every year effective Jan. 1, 2014.
On the other hand, the excise tax on fermented liquors (beer, lager beer, ale, porter and other liquors except tuba, basi, tapuy, etc) shall be the following:
Effective Jan. 1, 2013:
- If the net retail price (excluding the excise tax and value-added tax) per liter of volume capacity is P50.60 or less, the tax shall be P15 per liter.,
- If the net retail price per liter of volume capacity is more than P50.60, the tax shall be P20 per liter.
Effective Jan. 1, 2014:
- If the net retail price (excluding the excise tax and value-added tax) per liter of volume capacity is P50.60 or less, the tax shall be P17 per liter.,
- If the net retail price per liter of volume capacity is more than P50.60, the tax shall be P21 per liter.
Effective Jan. 1, 2015:
- If the net retail price (excluding the excise tax and value-added tax) per liter of volume capacity is P50.60 or less, the tax shall be P19 per liter.
- If the net retail price per liter of volume capacity is more than P50.60, the tax shall be P22 per liter.
Effective Jan. 1, 2016:
- If the net retail price (excluding the excise tax and value-added tax) per liter of volume capacity is P50.60 or less, the tax shall be P21 per liter.
- If the net retail price per liter of volume capacity is more than P50.60, the tax shall be P23 per liter.
On the other hand, the tax on all fermented liquors shall be P23.50 per liter effective Jan. 1, 2017.
The tax rate imposed on these liquors shall increase by four percent every year effective Jan. 1, 2018.
source: gmanetwork.com
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