Excessive tax hikes to worsen unemployment, poverty

A labor leader has warned that increasing tax rates on tobacco and alcohol excessively will exacerbate problems on unemployment, poverty, and crime incidence in the country.

National Federation of Labor Unions representative Hilario Punzalan told the House ways and means committee that it is the poor and ordinary workers who will be directly affected by moves to exact higher taxes on cigarettes and liquor.

The House of Representatives is holding hearings on House Bill 5727, which seeks to raise excise taxes by as much as 1,000 percent.

Punzalan warned that if the bill becomes law, factory production will slow down as higher prices will drastically reduce consumption of the commodities. This would lead to loss of jobs, which in turn will lead to poverty and may drive those affected to resort to illegal activities.

The union officer chastised the Department of Health for worrying on smoking-related deaths but turned a blind eye to deaths caused by unemployment, poverty and crime.

“Sinasabi nila maraming namamatay sa paninigarilyo. Mas maraming nakakahindik na kamatayan ang napapanood sa telebisyon na hindi dahil sa sigarilyo. Marami pong mga namamatay na mga Pilipino, young and poor, hindi naninigarilyo, walang pangsigarilyo, namamatay dahil sa ulcer. Maraming nababaliw dahil sa kagutuman dahil walang trabaho. Ang bill na ito ay magluluwal ng panibagong kamatayan sa mga manggagawa [They say many are dying because of smoking. There are more hideous deaths seen on TV not related to smoking. There are Filipinos, young and poor, non-smokers, or those who do not smoke because they don’t have the money to buy cigarettes, dying of ulcer. Many are going insane because of hunger because they have no jobs. This bill will give birth to new deaths among the ranks of the poor],” Punzalan told the lawmakers.

He clarified that they are for progressive taxation, but that the measure being pushed by the finance department is unfair to the local tobacco and alcohol industries which have almost eight million dependents.

“I am worried that if HB 5727 is passed, there will be no more factories in the Philippines. Instead, they will put up warehouses for imported products that will be favored over local products,” Punzalan said.

He said that the measure goes against President Benigno Aquino 3rd’s commitment to increase the employment rate in the country.

“If we have no jobs, we have no food, our children cannot go to school and the President’s straight path with become twisted and complex,” he added.

Associated Anglo-American Tobacco Corp. Vice President Blake Dy cautioned during the same hearing that if the measure is passed, the government “will be giving universal healthcare to a number of people while simultaneously afflicting them with the non-communicable disease of unemployment.”

NAFLU and AAATC officials appealed to legislators to protect the welfare of workers in the tobacco and alcohol industries by not passing the bill.