PLM Joins "No to Sin Tax, No to Another Regressive Tax Rally" at Senate PDF Print E-mail
Written by Partido Lakas ng Masa   
Tuesday, 16 October 2012 11:32

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Not Another Regressive Tax

 

Partido Lakas ng Masa (PLM) opposes the proposed sin tax reform bill not for its health provisions, but for being another form of regressive tax imposed against consumers, similar to the VAT or Value-Added Tax.  When the government imposed the expanded VAT in 2006, the argument was that it was needed to offset the country’s national budget deficit.  Since then, the 12% VAT continues especially on basic products, such as gas, electricity and water which magnify the problem of high prices shouldered by the poor.

 

Early this year, when gasoline prices soared to astronomic level, transport and consumer groups demanded a cut on the 12% VAT, but the government refused by saying that the collected taxes are needed for various “social programs.” Today, the government excuse is that the sin tax would generate around P60 billion yearly which could be used to fund the government’s “universal health program.”

 

The problem with this is that there is no such thing as universal health program under the present administration.  What we have is the PhilHealth insurance system which is funded by members’ contributions and which offered limited health coverage, sans medicines, for patients. The universal health care system as practiced in welfare state societies in Europe, Cuba, Venezuela, and Malaysia provide almost free health care, hospitalization and medicines for all citizens in these countries. This explains the term “universal” in health care.

 

The Aquino government is also implementing a Public-Private Partnership scheme which will privatize several public hospitals in the country, including the Philippine General Hospital and the National Orthopedic Hospital. Hence, there is reason to suspect that the government’s intent on imposing high consumption tax on cigarettes and alcohol is not based on any comprehensive health program for the poor. The computation on the expected tax revenues alone proves that the additional tax is aimed not at cutting consumption, but at keeping it to a high level to ensure revenue target.

 

While we agree that the consumption of sin products should be curtailed, we do not believe that this could be done by inflicting more burden on the consumer. It can best be done by raising corporate taxes and undertaking massive information campaign against the evils of smoking and excessive drinking.

 

On this score, the government should investigate the failure of the Bureau of Internal Revenue to settle the tax evasion cases amounting to P1.2 trillion filed against tobacco and beer taipan Lucio Tan. A portion of this amount would be enough to fund the targeted 5 million new enrollees at PhilHealth without any one of them paying a single centavo.

 

Lastly, if the government is really intent on merely penalizing the users of cigarettes and alcohol, we still can offer another compromise that is beneficial to all: go ahead with the sin tax, but scrap the VAT first.

 

Sonny Melencio

Chairperson, Partido Lakas ng Masa (PLM)

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Last Updated on Wednesday, 24 October 2012 09:50
 

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