Senate's 'watered down' sin tax bill a disappointment ? BIR's ...

(Updated 7:17 p.m.) The Senate?s ?watered down? version of the sin tax bill ? a measure to restructure excise tax on tobacco and alcohol products ? is a big disappointment, Bureau of Internal Revenue Commissioner Kim Henares said Thursday.
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?Our Secretary of Health had already said they were very disappointed? Those statements basically reflect how I feel,? Henares told reporters on the sidelines of case filling at the Department of Justice. ?I don?t have to say more than that.?
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Henares, who heads the government?s top revenue collection agency, noted the additional tax take from the measure would go to the Department of Health, not state coffers.

The Aquino administration will push for the amendments to the sin tax measure as the committee report will still be tackled on the Senate floor. ?We?re going to advocate [for the P60 billion]. It will still go to plenary,? according to the BIR chief.
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?It is a health measure? Whatever is collected from the sin tax? lahat ay mapupunta sa health,? the BIR chief said.
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?Kung ang nakokolekta natin sa excise tax sa sigarilyo ay P45 billion, pero ang medical expenditures ay P144 billion?? Henares noted, saying government would be ahead in terms of revenues versus expenditures ?kung walang maninigarilyo...?

Even Senator Ralph Recto's colleagues in the Senate objected to his version of the sin tax bill and vowed to amend it.
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In statement, Senator Miriam -Santiago said she was dismayed with Recto's committee report.
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"I am gobsmacked ? speechless with amazement ? at the committee report. It bears no recognizable resemblance to my bill. It is an abject surrender to the very rich and very powerful tobacco and alcohol lobby," she said.
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Santiago is the principal author of Senate Bill No. 3249, "An Act restructuring the excise taxes on alcohol and tobacco products."
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The bureau collects around P60 billion in excise taxes from tobacco and alcohol products and, through the new sin tax measure, the executive department expects to add another P60 billion.
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The Senate ways and means, chaired by Recto, recommended on Wednesday a sin tax measure that will raise P15 billion to P20 billion in additional revenues for government.
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This is lower than the bill approved by the House of Representatives last June which is expected to raise P31.35 billion in the first year of implementation and much lower than the proposal of the Aquino government which is expected to raise P60 billion.
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Under her bill, Santiago said government stands to gain P60 billion in additional tax collections in the first year.

In an interview with reporters, Senator Franklin Drilon said he is recommending a two-tier system covering the highs and lows of taxing sin products.
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The lower level should be equivalent to a tax rate of P15 and the high-end at P30, Drilon said, noting the high and low should be merged in a single rate after two years.
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He the bill would likely be approved by mid-November. "We just have to move quickly.
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?My agreement with Senator Recto and other senators is that we will finish the sin tax debates before we commend the debates on the budget in mid-November," Drilon added.
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In a separate interview with reporters on Wednesday, Recto said his bill is not a watered down version but a realistic, responsible version of the the government?s proposed measure.
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"This is not watered down, because the proposal of DOF? we hosed it down based on rosy assumptions and rosy projections," he said.

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Government's projection of P30 billion in additional revenues on tobacco is unrealistic, according to the senator.
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"There is a point of diminishing return. You want to wipe out the deficit? Patawan natin ng kada cigarette P100... We wipe out the deficit, pero may bibili pa ba nun? Makokolekta pa ba yun? Sa papel lang makokolekta yun," Recto noted.?
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?I was inloved in many reform measures. This one is 14 years in the making. This is one of the most difficult reforms. I had hope that? [the Senate version would] be different,? said BIR's Henares.

Still, Recto said he is open to amendments. "This is a committee report. May proseso. Eto ang recommendation ko. Ang i-iral dito ang kagustuhan ng Senate for a Senate version.
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?We?re 23 senators and I?m just given the task of putting out a report. Whether this will be further reduced or increased, will be subject to a vote," Recto added.

In press briefing Thursday, Presidential Spokesperson Edwin Lacierda said that Malaca?ang will continue to push for its own version of the law.
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Echoing the sentiments of Finance Secretary Cesar Purisima and Heath Secretary Enrique Ona, who ?expressed some dismay,? the Palace official noted the basis of Malaca?ang?s reaction to the Senate bill.
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The Health Department earlier said the sin tax bill crafted by the executive branch could boost the universal health program by 43 percent. ? With a report by Patricia Chiu/VS, GMA News

Source: http://www.gmanetwork.com/news/story/277850/economy/finance/senates-watered-down-sin-tax-bill-a-disappointment-mdash-birs-henares

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