After a month of grueling debates, the Senate finally approved on Tuesday night on second and third reading the Sin Tax Reform Bill, which aims to collect additional P40-billion revenues in the first year of implementation.

A total of 15 senators voted in favor while two against the measures after adopting 37 individual amendments on Senate Bill 3299, or An Act Restructuring the Excise Tax on Tobacco and Alcohol products, which was certified by President Benigno Aquino III as urgent.

Those who voted in favor of the measure were Senate President Juan Ponce Enrile, Senate President Pro-Tempore Jinggoy Estrada, Senate Majority Leader Vicente Sotto III, and Senators Pia Cayetano, Franklin Drilon, Loren Legarda, Ferdinand Marcos, Aquilino Pimentel III, Teofisto Guingona III, Gregorio Honasan, Ping Lacson, Ralph Recto, Lito Lapid, Ramon Revilla and Manny Villar.

Senators Joker Arroyo and Francis Escudero cast negative vote while Senators Miriam Defensor-Santiago, Alan Peter Cayetano and Sergio Osmena II have already left the session before the voting. Senators Edgardo Angara and Francis Pangilinan were absent while Senator Antonio Trillanes IV is out of the country.

The measure aims to deter smoking and excessive drinking while generating additional revenues for the government’s universal health care program.

Drilon, who sponsored the bill on the floor, the Senate has 60/40 burden sharing with tobacco industry to get the higher burden of the P40 billion in projected revenues in 2013.

Drilon said the P40-billion incremental tax would increase to P45.7 billion in 2014; P52.3 billion in 2015, P57.7 billion in 2016, P64.4 billion in 2017.

If passed into law, effective Jan. 1, 2013, the excise tax of cigarette per pack will be P12 and will increase by P3 every year up to 2017.

Drilon said on the fifth year in 2017, the unitary tax of cigarette per pack will be P26 and would increase by four percent starting in 2018.

Drilon, also acting chairman of the Senate committee on ways and means, read the 37 amendments before allowing other senators to introduce respective additional amendments, including two from Senate President Juan Ponce Enrile.

Enrile proposed that 15 percent of the raw materials of the locally-manufactured cigarettes products should be sourced from the locally-produced Virginia tobacco in the northern Luzon.

”I want to protect our local tobacco farmers and workers,” Enrile said.

Drilon accepted Enrile’s amendment despite concerns that the country would get into trouble with its commitment with the General Agreement on Tariffs and Trade (GATT) and World Trade Organization (WTO).

Enrile, a veteran lawmaker from Cagayan province, inserted new section which would earmark P2 billion to combat possible increase in smuggling of cigarettes and alcohol products as a result of the higher excise tax.

Last Monday, the senators agreed in a caucus to the P40- billion revenue target of 60 percent, or P24 billion of it to be collected from tobacco industry and 40 percent, or P16 billion, to be split and shared in accordance with historical burden sharing between the fermented liquor and distilled spirits.

The Senate ratified on the floor the consensus but has ran out of time to proceed with the individual of amendments after Enrile succeeded in pushing to discuss first the equally-important Reproductive Health bill.

The Senate also ratified an agreement from the caucus that there would be unitary tax rate for cigarettes effective the fifth year of the implementation and “not on the 4th years” as originally designed on the bill.

Some of the individual amendments presented and approved on the floor included the restoration of 15 percent share of the Virginia tobacco-producing provinces as provided under Republic Act 7171.

Drilon lauded the approval of the bill, saying it would boost the government health care program as well as address the high prevalence of smoking in the country.

The sin tax reform bill, he said, was a health measure to address the high case of deaths and illnesses due to smoking estimated at 80,000 Filipinos deaths per year, or 10 people per hour.

Also, smoking, as per the Department of Health data, costs the government about P218 billion to P416 billion in annual health care expenses and productivity losses, said Drilon.

Meanwhile, Drilon underscored the benefits of the bill to the farmers. Of the amount to be generated, 15 percent of it, or around P6 billion, would go to tobacco farmers to help improve their craft and to assist them in switching to a different crop that yields higher income. The P6 billion will be in addition to P4 billion that, at present, is allotted annually to tobacco farmers, said Drilon.

“The bill will double the safety net being provided under the law to help them augment their income and to support alternative livelihoods for the farmers,” said Drilon.

The safety net, could be used to assist the farmers who wanted to shift from planting tobacco to farming other more profitable crops like corn, garlic, tomato and pepper, Drilon said.

LAUDED

Meanwhile, Health Secretary Enrique Ona lauded the passage of the much-debated bill with 15 senators voting for it and only two voting against.

“The passage of this bill is a victory in our campaign to protect our people, especially the young and the poor, from the ill-effects of smoking and excessive drinking. At the same time, the additional revenues will be used to fund the expansion of PhilHealth enrolment to the second poorest 20 percent of our population, upgrade and modernize our hospitals and other health facilities, and expand our existing preventive and promotive programs under Kalusugan Pangkalahatan,” Ona said.

 “With the expected approval of the sin tax bill, our health care system will be getting the badly needed funds, to make Kalusugan Pangkalahatan or universal health care a reality for our people,” Ona said.

REASON TO QUIT

This development makes way for the increase of prices in cigarettes and will push some smokers to quit smoking, according to Iloilo City Anti-Smoking Taskforce director Inigo Garingalao.

“Mataas ang price ka cigarettes kada tuig. We hope our students and poor people will realize they’d better not smoke. Instead, they should spend on education and food,” he said.

On the other hand, “Nonoy”, 16, a public high school student and son of a smoker, said that he will not stop smoking even if the price of cigarettes will increase. But, he will reduce his daily consumption because smoking is already a part of his routine especially during siesta time.

Meanwhile, security guard Reynan Huergula said he started smoking when he was employed as a security guard because it helps energize his body especially when he’s on midnight duty.

He said he consumes 10 cigarette sticks a day. The cost of each cigarette is P 2.00 and if the price does increase, Huergula said he will lessen his daily consumption.

MINORS

Meanwhile, Garingalao said that most of the violators of the city’s Anti-Smoking Regulation Ordinance 2006-150 are minors especially students caught inside and outside their schools.

Ever since the ordinance was implemented in September 2010, ICAST has arrested more than 2,000 violators.

Under the ordinance, the first offense results to a fine of P500; second offense, P1,000; and third and subsequent offenses, P5,000.

The case will be referred to the city’s legal department if the violator fails to pay within three days.

Meanwhile, an establishment caught without a designated smoking area will be fined P500 for the first offense; P1,000 for the second offense and one week suspension; and P5,000 for the third offense and recommendation of business closure.*PNA with Montesa Grino-Caoyonan/gov.ph