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(UPDATE, 2:12 p.m., October 12) Former health secretary and retired senator Juan Flavier, principal sponsor of the Tobacco Regulation Act of 2003, on Friday blasted the committee version of the Sin Tax Bill put forward by Sen. Ralph Recto. What critics have called a "watered-down" version of the original bill, Flavier called a "diminished" proposal that would "preserve the status quo" on tobacco use in the Philippines for years.
Flavier, retired from politics and low-key since leaving the Senate in 2007, said it is unlikely for any Sin Tax law to have its desired effects if legislators vote based on the committee report submitted by Recto.
"It's not about passing a sin tax law. It is about passing a sin tax measure at the effective and proper rates. Otherwise, naglolokohan lang tayo," Flavier said in a statement released by anti-tobacco coalitions.
"The sin tax bill as originally proposed would have moved us forward. Recto's version keeps us all in the same place. There is also a preponderance of evidence worldwide that higher taxes achieve two things: they reduce the incidence of smoking by raising prices, and they raise more revenue that we can hopefully plow into healthcare. If you water down the rates, the twin benefits are diminished," the 77-year-old former health chief and senator said.
He expressed disappointment at Recto’s P15 billion sin tax proposal that was lower than the P30 billion tax measure approved by the Lower House.
Flavier, whose untainted public service record at the DOH catapulted him to the senate twice in 1995 and in 2001, said legislators should heed recommendations by the World Bank and the World Health Organization on proper sin taxes that would be effective enough to curb smoking and at the same time generate huge revenues for health care.
Both international institutions recommend a 70 percent excise tax on the retail prices of cigarettes to achieve a two million reduction in the number of smokers by 2016. Flavier said imposing higher taxes on cigarette products is justified and realistic considering it had been 16 years that sin taxes were based on tobacco products’ 1996 retail prices.
Flavier warned that Recto's proposal would keep tobacco prices cheap and accessible to the poor and the young.
He added: "Knowing how hard legislation is, it basically extends the status quo for years or at least until we have more progressive senators."
House stands by its version, prepares for debate
At the House of Representatives, Speaker Feliciano Belmonte Jr. on Friday said congressmen will stick with the Lower House's version of the Sin Tax Bill. "We will stick with our version... The government can have bigger collection from it," Belmonte said in a text message.
The House's sin tax bill that was approved on third and final reading in June this year targets P33 billion in collected revenues from the tobacco industry per year. The Senate version, approved recently at the committee on ways and means, is expected to generate only about P15 billion per year.
Belmonte said they will be ready to debate with Recto.
In a separate statement, Eastern Samar Rep. Ben Evardone said the House should "resist the strong lobby of the tobacco industry."
Evardone said the House version "reflects the true sentiment of the public for good health and fiscal reforms." He added: :The campaign of the government for good health and universal healthcare will fail if we adopt the Senate version."
Deputy Speaker Lorenzo "Erin" R. Tañada III said the Sin Tax bill is not only a matter of revenues, but of health. "The logic is quite simple and straightforward," Tañada said. "Going by BIR (Bureau of Internal Revenue) chief Kim Henares' figures, only about P45 billion will be collected from cigarette excise taxes but government spends P144 billion in medical expenditures for tobacco-related health problems. Government ends up ahead if people stop smoking altogether."
Defending the Senate version, Recto had said that based on the figures submitted by the Department of Finance and the BIR, his proposal is "more realistic" in targets for generating revenues and decreasing consumption of alcohol and tobacco products.
Recto said he is willing to debate with his colleagues on the floor to refine the version that he reported out.
Flavier reminded legislators that the sin tax is "first and foremost an anti-cancer tax". He endorsed anti-tobacco advocates statements that an effective sin tax law can help save the country from a possible lung cancer epidemic brought by a high smoking population and the availability of cheap cigarettes.
Flavier said Recto's proposal puts the interest of the tobacco industry above the public health interests of the country, and puts tobacco control measures at a stalemate.
"Kung gusto nila magpaloko, that's up to them. But I hope none of them looks to fooling our people as well," the former senator said.
Meanwhile, the Southeast Asia Tobacco Control Alliance (SEATCA) warned that Recto's proposal would continue to create an imbalance between revenues and health costs due to smoking.
"What was so beautiful with the sin tax bill as originally proposed was that even with less people smoking, there would be more tax revenues that can go to public health programs. But with Senator Recto’s watered-down version, the health costs to the Philippines will continue to outweigh any revenues to be generated from a weak sin tax law," said SEATCA.