The Sin Tax Coalition condemns the passing on the third reading of House Bill 11360 or the Sin Tax Sabotage Bill during the House of Representatives’ February 3 regular session. We expected this outcome in the House of Representatives, which has become a rubber stamp of vested interests and which kowtows to the pro-tobacco position of the President and House leadership.
The railroading of the Sin Tax Sabotage Bill was obvious. In the face of strong opposition to the bill that will effectively lower tax rates and will result in further decline in revenues, the House leadership backtracked and said that further hearings on the bill were cancelled.
But Speaker Romualdez reneged on his commitment to cancel further hearings. So, without even informing stakeholders in advance and without stakeholders getting any formal invitation, the House Committee on Ways and Means suddenly called for a briefing session. A briefing session does not entail any voting, But the briefing was suddenly and deliberately converted into a hearing mid-session, allowing the sponsors to force a vote and pass the Committee Report despite their inability to address the bill’s overwhelmingly negative revenue and health impacts. The same Committee Report was calendared to be heard at the plenary the following day and was passed on the second reading at 2:09 AM, January 29th after amendments to include new provisions directly increasing the pork barrel of districts represented by the measure’s authors were inserted.
Despite its sponsors’ claims that the bill will address illicit trade, the Sin Tax Sabotage Bill does not actually contain any among the globally recognized best practices to combat illicit tobacco trade. Instead, the bill deals two-fold damage to both fiscal and public health.
The lowering of tobacco taxes is bound to make cigarettes and other tobacco products more affordable. Making these products more accessible in this way will result in a smoking incidence increase of over 350,000 new smokers and approximately 12,000 tobacco-related deaths over five years. This places the public healthcare system in an even more precarious position, as it will be forced to bear the burden of the additional tobacco-related deaths and diseases amidst rapidly rising healthcare costs.
Furthermore, there is no substantial evidence that the bill will recoup revenues lost to illicit tobacco trade. Since the measure was filed, the Department of Finance has made no effort to present any revenue estimates that would allow legislators to make informed policy decisions. In the agency’s failure to provide much-needed data, the Secretary of Finance has fallen short in his mandate to protect the government’s coffers.
The Finance Secretary must likewise be condemned for not objecting to a bill that will sabotage the sin tax law, a bill that will further harm health and at the same time reduce revenues when the country is trying to address the fragile fiscal space. In truth, this is not surprising since Mr. Recto has always promoted the commercial interests of the tobacco industry. His shameful support of a tobacco industry bill on taxes during the PNoy administration prompted advocates to call him “Recto Morris.”
The Sin Tax Sabotage Bill is nothing more than a shameless surrender to the tobacco industry’s will.
Representatives Mikaela Suansing, Rufus Rodriguez, and Kristine Singson-Meehan, the sponsors, and all those who voted for the bill’s passage are all complicit in sacrificing public health to boost the tobacco industry’s profits. Speaker Martin Romualdez and his ruling clique in the House and Finsmce Secretary Ralph deserve the harshest condemnation for allowing the sabotage of the sin tax law to happen.
Their shameful act is but the most recent of other abominable acts they committed: the transfer of PhilHealth funds to the national government, giving PhilHealth a zero budget in the 2025 General Appropriations Act, and allowing the diversion of the PhilHealth funds and sin tax revenues to finance the pork barrel and political patronage.#
