Senate, House ratify bicam's sin tax reform version

Posted at 12/11/12 8:21 PM

MANILA, Philippines - The Senate on Monday ratified the bicameral version of the proposed sin tax reform law in a close 10-9 vote.

Senator Joker Arroyo said the vote means the Senate is divided on the issue, but Senate President Juan Ponce Enrile said this is a democracy and they respect the wisdom of the majority.

Enrile, along with Arroyo, Jinggoy Esrada, Francis Escudero, Bongbong Marcos, Ralph Recto, Gringgo Honasan, Vicente Sotto, and Bong Revilla voted no.

Meanwhile, Edgardo Angara, Pia Cayetano, Miriam Santiago, Franklin Drilon, Panfilo Lacson, Lito Lapid, Serge Osmeña, Francis Pangilinan, Koko Pimentel and Antonio Trillanes IV voted yes.

Alan Peter Cayetano, Manuel Villar, Loren Legarda, TG Guingona were absent.

As the House of Representatives has also ratified it,  it can now be sent to President Benigno Aquino for his signature.

Once signed by the President into law, it will impose higher tax rates for alcohol and tobacco products effective January 1, 2013.

The Bureau of Internal Revenue will determine the new net retail prices in a price survey under oath.

BIR Commissionner Kim Henares, however, clarified that the higher tax rates may not necessarily end up being shouldered by the consumers because companies may want to subsidize them based on market conditions and their business models.

The sin tax reform law was passed amid intense lobbying by tobacco companies, with the Aquino administration packaging it as a health reform measure that seeks to discourage smoking while generating revenues for state health projects.

The bicameral panel agreed to cover all local hospitals as beneficiaries in revenues from the tax measure.
It also approved a 69%-31% burden sharing for the tobacco and alcohol industries once the consolidated bill becomes law next year.

Senate Finance Committee Chair Franklin Drilon expressed optimism that the bicameral panel’s formula will not kill the local tobacco industry.

The Senate version proposed a 60-40% burden sharing, while the lower House version wanted an 87%-13% burden sharing.