Recto: Gov't can't collect P45 billion from sin taxes

Posted at 11/07/2012 6:18 PM | Updated as of 11/08/2012 6:58 AM

MANILA, Philippines - The former sponsor of the sin tax reform bill in the Senate said the new version of the measure that raises the government's projected collections to P45 billion is not achievable, and warned that it would cause job losses in the tobacco and alcohol industries
 
Sen. Ralph Recto told reporters on Wednesday that the tax rates in Sen. Franklin Drilon's version of the sin tax bill are too high.
 
Recto, who resigned as chair of the ways and means committee and was replaced by Drilon, explained that companies would have to raise billions more than what they presently earn.
 
"If we add P45 billion additional taxes, they need to sell P255 billion," Recto said. "How do you collect that with fewer packs and fewer bottles?"
 
Drilon, the acting ways and means committee chairman, said during interpellations on the bill on Tuesday that the government should be willing to take the risk of low revenues if higher taxes would result in fewer people smoking.
 
Recto also raised the possibility of job losses not just in the cigarette and alcohol sectors.
 
"Alcohol comes from sugar, so sugar farmers would be affected like tobacco farmers. There are manufacturing jobs in between, retailers and sari-sari stores. In between, there are logistic providers, distributors and dealers," he said.
 
Recto had said before that his proposal, in which revenues are projected to be between P15 billion and P20 billion, is more reasonable.
 
"Kung reasonable lang ang pagtaas, may magbabawas ng inom at sigarilyo at walang mawawalan ng trabaho. Makokolekta pa ng gobyerno ang gustong makolekta, at mayro'n pang pondong pangkalusugan," he said.
 
Recto stressed that he won't be an obstacle to the bill's passage. "But I want to put on record our findings to enrich the record of the Senate as well," he added.

Drilon said he hopes to pass the sin tax bill on November 19, so deliberations on the 2013 budget can begin on the November 20.