'Explain why sin tax law fails to curb smoking'

By Christina Mendez, The Philippine Star

Posted at Mar 24 2014 09:58 AM | Updated as of Mar 24 2014 05:58 PM

MANILA - The Senate wants to summon cigarette manufacturers, officials of the Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC) to explain why the year-old sin tax law has failed to slow down the smoking habit of Filipinos, which was the rationale made to pass the law.

Sen. Juan Edgardo Angara, chairman of the congressional oversight committee on comprehensive tax reform (COCCTR), said he also wants the BIR and BOC to present accurate data on tobacco importation, cigarette production and the corresponding taxes and duties slapped on tobacco leaves as well as excise taxes collected from cigarette makers.

Angara noted that there have been persistent reports of alleged smuggling of tobacco leaves and other cigarette-making materials.

He also wanted to get information from the BIR and Customs officials why the smuggling continues to proliferate and whether there is truth to reports that some cigarette manufacturers evade payment of taxes for their cigarettes.

Angara said that he and his fellow lawmakers were unhappy with presentation by the BIR and BOC during the last hearing of the COCCTR.

“It’s really important for the BOC and BIR data to match because if tobacco used for producing cigarettes are mixed with undeclared imported tobacco leaves, then (tax) collection will suffer,” Angara said.

The senator noted the case of cigarette manufacturer, Mighty Corp., that reportedly continues to produce cigarettes even after the BOC had closed down customs bonded warehouses for tobacco leaves.

Angara expressed disappointment that the Customs officials were not able to give a full report when asked about the circumstances.

Only the BIR representative stated that Mighty Corp. has been placed on 24/7 watch.

“The data was unclear. Senators (Vicente) Sotto III, (Ferdinand) Marcos (Jr.), (Teofisto) Guingona and I were not satisfied with the BIR and BOC data, which appeared to be incomplete. Even the BOC representative doesn’t seem to be familiar with the discussion,” Angara said.