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House starts deliberation on sin taxes
03 February 2009 09:37:48 AM
Writer: Abigail Modino Macabeo, MAS-PRID

The House of Representatives has started deliberation on the controversial bills on sin taxes in a bid to increase tax collections of the government.

Rep. Danilo Suarez (3rd District, Quezon), author of House Bill 3759 proposing a unitary tax rate on cigarettes, said however, that aside from revenue collection, "the thrust of these measures on sin taxes is to discourage the youth from taking cigarette and liquors at the early age."

"Cigarette smoking has become a status symbol for the youth and is considered as a primary cause of respiratory illnesses resulting in financial burden on the government in terms of increased health assistance and subsidies to citizens," Suarez said.

Rep. Joseph Gilbert F. Violago (2nd District, Nueva Ecija), author of House Bill 4951, said that while the primary purpose of taxation is to raise revenue which is an essential support for the myriad functions of the government, taxes can also be made effective to implement police powers to promote general welfare such as safeguarding the health of its people and funding essential services to promote public health.

Earlier, Speaker Prospero Nograles said the House would focus on certified bills, including measures on sin taxes.

Aside from HB 3759 and HB 4951, other measures on sin taxes being deliberated on by the House Committee on Ways and Means, chaired by Rep. Exequiel Javier (Lone District, Antique) are HB 2551 increasing excise tax rates on alcohol and tobacco products filed by Rep Bienvenido M. Abante Jr. (6th District, Manila), HB 3917 increasing tax rates on cigars and cigarettes by Rep. Jose G. Solis (2nd District, Sorsogon) and HB 3787 seeking to restructure the excise tax on alcohol products also by Suarez.

"The government can take either the direct approach, by generating spending, or the indirect approach by imposing tax first and giving it back to the taxpayers," Javier said.

Finance Secretary Margarito B. Teves, who appeared before the House panel, expressed support for the measures seeking to increase tax rates on cigarettes particularly those authored by Suarez and Violago as these address the issue of restructuring tax rates.

"If tax rates are simpler, it could be easier to administer them unlike the present system," Teves told the House committee.

But, former BIR Commissioner Rep. Liwayway P. Vinzons-Chato (Lone District, Camarines Norte) and who also supported the bill, said that a lot of taxes are not properly collected because of inefficiency under the present system.

Chato said Congress can enact several tax measures but the main problem is the present tax collection system.