PHILIPPINES: Sin Tax Bill

It has been a long battle for the sin tax reform measure which was proposed as early as 1997. For almost 16 years of deliberation and scrutinization and sometimes set aside, the long-awaited measure restructuring taxes on tobacco and alcohol products was signed into law by President Benigno C. Aquino III, late last year as his “Christmas gift” for millions of people. For weeks, and months, sin tax bill has been the content of news reports on television, radio and even newspapers. It acquired a lot of different reactions and views from different groups of people, smokers or not.

Republic Act No. 1035 otherwise known as the sin tax reform bill achieves to lessen cases of people putting their health at stake by having additional tax collection to bad vices such as cigarette and liquors. The prices will continue to increase each passing year as per evaluation. Furthermore the proponents said that it will give large amount of profit to the country and that a large part of the revenues that will be collected would go to the government’s health care program and for the construction and upgrade of local and major hospitals nationwide.

According to the studies in the Cigarette Pricing System, currently, Singapore charge the highest tax in cigarette and the Philippines charge the lowest while the industry collects billions from the users as compared to the other countries in the world. But even with the increase in prices of cigarettes, Malacanang reports that the prices of cigarettes in the country are still low compared to the prices among other Asian countries where prices of tobacco products can rage up to P50 per pack.

Department of Health says that the country (Philippines) has 17.3 million estimated tobacco consumers where Filipinos on average consume 1, 073 cigarette sticks in a year and one reason that have been seen is the cheap price. The department also pointed out that smoking cause 71% of lung cancer deaths in the world, which is the leading form of cancer in the Philippines too. In addition, DOH said that 10 Filipinos die every hour due to smoking.

The National Youth Commission (NYC), along with other survey companies released results that predict that the number of young smokers decrease consumption once cigarette prices increase, along with the decrease of cigarette consumption per day by smokers. The law is also considered a tool that would discourage smoking.

Unlike smoking, drinking alcohol has less severe effects to human health and as per the health department; an increase in the price of cigarettes may also reduce the number of smoking-related deaths due to the decrease in the number of smokers in the next four years upon the implementation.

The sin tax bill may be very effective when we talk about health-wise for it avoids cases of lung cancer and what nots but it might also cause to the death of the tobacco farming industry in the Philippines because unlike other countries, the Philippines has not conducted any strategies on where to divert the possible decrease in the market of the cigarettes. Big companies engaged in this business could kill their industry and lose the job of dozens of tobacco farmers. Increasing the tobacco price might make users decide to quit it which will lead to the sudden death of the firms offering the said products.

And another side of this bill is actually trying to maximize the potential revenue sources for the benefit of the entire community and sustain the continuous growth of the country’s economy. But the gain of the government might not be met due to the sudden death of the industry which may as well result to the loss of jobs and livelihood to others.

When we talk about general welfare, we need to consider the health of the people, however, we need to reconsider the economy and the industry to where we are moving at. The taxes may really increase for the next coming years upon implementation of the law and the health-related death due to smoking may as well decrease, but how about the jobs that may be affected? It may be so easy to look for another job but as the popular quotation goes, “better said than done.”

We may never know if people would actually lessen their ‘intake’ of these vices, because once they’re addicted they’ll always find a way to get what they want. Also we may never know if the taxes collected by the government would actually go to our health care or maybe be put right away in their endless pockets.

We may see cons with every pros that we have, but at the end of the day, it would then depend on its implementation, shares, monitoring of where the money goes. In the long run, we may never know if a sudden miracle happens and this law would actually work. For the mean time, we should at least trust the government on its aim of protecting the health of our people and at the same time increasing our revenue. Whatever may be the effect of the actions we have nowadays, we just need to hope for the best not just for our country but also for the next generation.


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