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Rm. N-411, House of Representatives, Quezon City, Metro Manila, Philippines
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EXPLANATION OF NEGATIVE VOTE FOR HOUSE BILL 4144

HOR Debates

 

I vote against House Bill 4144 (“An Act Amending Section 145 [C] of the National Revenue Code of 1997, as Amended”) for the following overriding reasons:

  1. The one-tier taxation for all kinds and brands of cigarettes at P30/pack starting in January 2017 is precipitately jettisoned in favor of retaining a two-tier regime of P36 for premium cigarettes and P32 for value or lower-priced cigarettes. The efficacy of the unitary system scheduled in 2017 has not even been tested on the ground. Long and even acrimonious debates had preceded the enactment of Republic Act No. 10351 (Sin Tax Reform Act) which eventually installed starting 2017 the one-tier system of taxation. All of these debates and inputs will be put to naught with the enactment of House Bill 4144.

  2. All of the government agencies invited during the only two public hearings from the Department of Finance, the Bureau of Internal Revenue to the Department of Health were opposed to House Bill No. 4144. Only the National Tobacco Administration was in favor of the measure.

  3. More than a revenue measure, the Sin Tax Reform Act was hailed as a health measure. Any amendment to this Act must prioritize health concerns. However, House Bill No. 4144 is anti-health because with a two-tier taxation, majority of cigarette smokers will be encouraged to shift downward to lower-priced brands, instead of quitting smoking because they could not afford or patronize the higher priced premium cigarettes. Consequently, HB 4144 defeats the purpose of reducing the number of smokers as smoking is the single biggest cause of cancer in the world.

  4. The two-tier system is more difficult to administer than the unitary system, and it is more conducive to tax evasion and other tax collection irregularities.

  5. The unitary system is the taxation of choice of so many countries, including Australia, Japan, Ireland and Thailand, and it is considered a best practice globally.

  6. All of the principal players in the cigarette manufacturing industry, except Mighty Corporation, were against House Bill 4144.

  7. House Bill No. 4144 is flawed as a grossly discriminatory tax measure because it principally, if not solely, favors Mighty Corporation, which produces low-grade and low-priced cigarettes.