Tobacco tax hike to worsen smuggling — lawmakers

By Macon Ramos-Araneta | Posted on September 12, 2012 |

Cigarette smuggling in Mindanao is worse enough but it could worsen even more as a result of a plan to hike the tax on tobacco products, a lawmaker warned on Tuesday.
The Philippine Navy, mandated to guard the shorelines against enemies of the state, cannot control the backdoor so that the smuggling of cigarettes and other products from nearby countries continues to thrive in Mindanao, Senator Antonio Trillanes IV said on Tuesday.
Recalling his experiences as a Navy officer, Trillanes supported the statement of Senate President Juan Ponce Enrile about the country’s inability to regulate illicit trade. He said the government does not have the resources to address this problem.
“The question is: Are we efficient (to curb smuggling? No, we are not,” said Trillanes, a member of the senate ways and means committee chaired by Senator Ralph Recto.
Recto’s committee is conducting a public hearing on the proposed 700 percent increse in the tax on cigarettes and alcohol.
Enrile earlier said the government cannot collect what it wants to collect because of the possibility of black market traders shifting to smuggling and other illicit means to avoid the increased tax.
“We are one with Senator Enrile on this. If this will pass into law, smuggling will be the consequence. Are we efficient in addressing smuggling? No we are not. When I was assigned in Zamboanga, I witnessed the so-called ‘blue-seal’ smuggled cigarettes enter the country,” noted Trillanes.
Trillanes cited the need to study tax increases and identify the ideal rate which the market can absorb so that smuggling would not worsen.
He called on Finance and Health officials to stop confusing the public on their contradictory positions on the excise tax intended to generate additional revenues for the government and reduce tobacco consumption.
He said the government is confused on what it wants to do with the excise tax bill.
“If this is a tax measure, then DOF and BIR must be the only agencies concerned with this issue. Let’s not put any drama to this,” he said.
“The DOH, on the other hand, says it wants to reduce smoking consumption and yet desires that the DOF collect additional revenues of P60 billion that it can use for universal health care,” he said.
On the Health department’s position that the excise tax bill is also a health measure, he challenged the government to also start taxing unhealthy food products like fatty foods and sweets, among others.