Tax hike didn’t cut smoking — study

Senators will ask the stakeholders in the tobacco industry on the government proposal to restructure excise taxes on tobacco and alcohol despite the admission made by Finance Secretary Cesar Purisima that the tax incrase did not lead to a reduction in the number of smokers.

“We believe that increasing taxes dramatically and therefore, increasing retail prices, will not lead to a dramatic decline in consumption,” Purisima said during an earlier hearing conducted by the Senate ways and means committee.

Citing a study, he said recent experience proved that cigarette consumption even went up amid increases in tobacco taxes and prices.

Purisima said that cigarette prices from year 2004 to 2011 increased by as much as 61 percent, but consumption did not go down.

He was referring to tobacco tax increases, which over the years, had led to corresponding hikes in the retail prices by as much as 99 percent.

Republic Act 9334 mandates tax hikes on tobacco and alcohol products starting Jan. 1, 2005 and every other year until Jan. 1, 2011.

But ways and means committee chairman Senator Ralph Recto stressed that what is important in the ongoing tax reform deliberations is coming up with the effective tax rate.

He noted that it was the sentiment of majority in the Senate to come up with a tax structure that would benefit all players equally.

Senate President Juan Ponce Enrile for his part said: “If are going to increase the tax that high, do you really think we can reduce the number of smokers or they will just reduce the number of sticks they are consuming but they will continue to smoke?”

Labor Union (PMFTCLU) president Rodelito Atienza asked: “if the declared objective will not be achieved, why is the DOF willing to cause so much injury to millions of stakeholders in both alcohol and tobacco industries who stand to lose their jobs or source of livelihood?”

Blake Dy, vice president of Associated Anglo-American Tobacco Corp., said that government was being “heavy-handed” needlessly. There are alternative ways of raising the money without causing such radical displacement, he said.

He said the government should keep an open mind on this matter. There are a number of ways to achieve government’s objectives without destroying the industry, he said.

Health Secretary Enrique Ona said the country is now Southeast Asia’s number one tobacco-consuming country with every Filipino smoker puffing an estimated 1,073 sticks yearly.

He pointed out that tobacco use is a risk factor in six of the world’s eight leading causes of preventable diseases. –Macon Ramos-Araneta, Manila Standard Today