“Shouldn’t we have public officials who are more protective of our national interests rather than the interests or other countries and international organizations?”
by Ducky Paredes
In her last SONA, the President quipped that taxes “should come from alcohol and tobacco and not from books. Tax hazards to lungs and livers; do not tax minds.”
But, aren’t we already taxing these “sin products” too much and possibly already taxing them to death? It would be good if we could see that the “sin taxes” were going towards improving the delivery of health services, as they should. Yet, the real reason why the Department of Finance is pushing for more and more “sin taxes” is not in any way related to anyone’s health
The real reason is explained by DOF Undersecretary Gil Beltran: “The WTO has been on us the last two years, complaining about the way we supposedly discriminate against foreign manufacturers of excisable products. They have been threatening to sue us ever since.”
But, why the rush to pass legislation that cannot take effect until 2012 because of the prior “sin tax” law that says that the next increase or revision can come only then? By then, a new President and Congress would be in office. So, why not let them deal with the WTO? For all we know, the new guys may be more competent in dealing with the world and we, like other countries, might have a chance to stand up to the WTO and win?
For instance, among the things that Beltran and the present DOF are willing to give up such as R.A. 6956 which says that if a distilled spirit is made of the sap of nipa, coconut, cassava, camote, buri palm or from the juice or syrup of sugar cane, it shall be subject to a single specific tax rate of P13.59 per liter.
On the other hand, distilled spirit made of all other materials is subject to a three-tiered specific tax system per liter (lowest rate at P 146.97 /liter) depending on its net retail price per 750-ml. bottle.
Most imported alcohol products are subject to the multi-tiered excise tax system as said products are generally made from grapes or potatoes. On the other hand, majority of the locally manufactured distilled spirits are made from the sap of nipa, juice of sugar cane, etc. and hence, subject to the single specific tax rate per proof liter.
This is good law since it encourages the commercial use of local materials that are otherwise of minimal commercial value.
The question that must be asked is whether our DOF is working for us or for the WTO and the European Union?
Not only that; do you know that while there is a WTO case filed by the European Union against the Philippines that WTO case does not involve tobacco products but only alcohol products. There is no WTO case filed by the European Union against the Philippines over alleged discrimination on foreign cigarettes. The WTO case filed by the European Union against the Philippines only involves alcohol products.
So, why, if the idea is to save us from possible WTO sanctions, are we bending over backwards and doing more than even what the WTO may be looking at?
Shouldn’t we have public officials who are more protective of our national interests rather than the interests or other countries and international organizations? Why do they seem to cower before the WTO when the proper stance is to have discussions with them on the special situations in our country?
Sure, we are part of the WTO but even the most advanced countries have disputes with the WTO rules. This is only normal since conditions in every country may force them to protect certain industries and products. For instance, in many countries, there are tobacco and alcohol monopolies, which do the importation, production and taxation of there products.
Certainly, the WTO is still in its learning stage and our government must stand up for the way that we do things in our country rather than live by rules set up by the Europeans and the Americans who, by and large, set the standards by which the WTO rules.
If our government officials cannot stand up to the world to explain us to the WTO and other international organizations, who else will do this for us?
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I came across a study in 1999 by Dr. Hana Ross of the University of Illinois at Chicago on Tobacco Taxes which states that our tax on cigarettes as a percentage of retail price is at 63%, second only to Australia at 75% among countries in our region. It is also the highest (at 11%) in the percentage total tax revenue of the total cigarette tax. China was also at 11%.
At what tax rate would we be shooting ourselves in the foot because it would actually reduce the tax take by discouraging consumers from altogether buying cigarettes?
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We have a query from reader Moises Montemayor: “’What did Ramos do in 1972?’ O typo error lang?”
Typo lang po! I was referring to Ramos’ successful run for the presidency, which was in 1992. I don’t think we want Ramos to repeat whatever he did in 1972, which was when Martial Law was declared.
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I haven’t been to a boxing match in a long time, although I would watch Pinoy fighters who would fight in Hawaii during the time that I lived there. The promoter of those events was Gabrial (Bebot) Elorde, Jr. who invited me to his boxing promotion at the San Andres Gym, under the sponsorship of Oasis Park Hotel Amazonia Bar and Isis Cub at the Traders Hotel.
I knew none of the fighters but it was an enjoyable show. It struck me that at the level of boxers just starting out as professionals, one never knows what to expect of the boxers but good boxers and those with ring savvy and experience easily stand out.
Bebot has promised to invite me again. Hopefully, he will keep that promise.
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hvp 09.13.09
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