PNoy says sin tax law an 'early Christmas gift'

by Willard Cheng, ABS-CBN News

Posted at Dec 20 2012 01:43 PM | Updated as of Dec 21 2012 03:16 AM

MANILA, Philippines (UPDATE) - President Aquino on Thursday signed the sin tax reform measure into law with legislators including Senate President Enrile looking on

Aquino signed into law the sin tax reform measure, describing it as an early Christmas gift from legislators.

The measure, expected to take effect on New Year's Day, is expected to generate P33.96 billion in additional revenue on the first year of its implementation.  

Aquino thanked lawmakers for not giving in to opponents of the measure, including the tobacco lobby.

"Batid po natin ang matagal na pakikipagsapalaran ng maraming sektor para sa Sin Tax Reform; 1997 pa po nang unang ihain ang ganitong klaseng panukala sa Kongreso. Halos labing-anim na mahabang taon kung kailan pinagdebatehan, binusisi, at kung minsan, halos isinantabi ang isang panukalang batas na magliligtas sa buhay ng mga Pilipino," he said. 

"Maraming nag-isip na imposibleng maipasa ang Sin Tax Reform Bill: malakas ang kalaban; maingay, organisado, at malalim ang bulsa ng mga kumukontra."

"Pero gaya po ng paulit-ulit nating napatunayan: Walang imposible sa Pilipinong sumasagwan sa iisang direksyon, nasa tamang lugar ang puso, at handang manindigan para sa kanyang mga prinsipyo. Hangga't nasa likod po natin ang ating mga boss, walang balakid na hindi natin madadaig."

Aquino told tobacco farmers not to worry, saying that they will be given bigger livelihood support with the passage of the measure.

"Lilinawin ko rin lang po sa mga magsasakang nabulungan ng agam-agam ng ilang sektor na kontra sa batas na ito: Wala po kayong dapat ikabahala. Ang benepisyong natatanggap ninyo dati ay hindi maglalaho; ang totoo nga po-sa amin pong pakiwari-lalaki pa iyan, habang tumitibay naman ang suporta sa inyo ng pamahalaan sa pamamagitan ng iba pang ayuda," he said. 

The President noted the measure is intended to promote fair competition in the tobacco industry by rationalizing excise tax rates.

Most of the revenues will go to the government's health care programs.

According to a briefer on the new sin tax law, "80% of the incremental revenues after deducting the support for farmers… will be allocated for the universal health care… and 20 percent will be allocated nationwide for medical assistance and health enchancement facilities."

BIR Commissioner Kim Henares said the law is expected to be effective on January 1, 2013. The law and the revenue regulation will be published within December.

Prices of cigarette and alcohol are expected to increase following the enactment of the measure. Government hopes that this will encourage smokers and drinkers to drop the habit.

"This is a health measure. If you look at it, we really want the price to go up so that people will minimize their smoking or they will not start smoking if they haven't started especially the poor and the young. As far as the government is concerned, if they increase the price, then it achieves one of the objectives of the law, which is to make tobacco product more expensive than it is now so that people will think twice about starting to smoke or think about stopping altogether," Henares told reporters.

Aside from the fiscal incentive rationalization bill, there is no other revenue generating measure that the Aquino administration is eyeing for now.

"Pending is the fiscal incentive rationalization bill. Aside from that, there's nothing yet on the table. I think it would have to wait until the new Congress comes in July 1," Henares said.