Filipino ‘sin tax’

Different people may have different reactions to the sin tax law, due to take effect on January 1, but it sure has got many people do some thinking — even serious thinking for some.

“I think I have to think about it seriously,” says Raffy Butch Bacaoco, a father of four and the editor for Bacolod City, in central Philippines, of Sun.Star, the Philippines’ only major English-language daily based outside Metro Manila.

He is referring to the Sin Tax Bill, signed into law by President Benigno Aquino III on December 20 after the Senate passed it on second and third readings on the same day of November 20.

The bill seeks to collect 40 billion pesos (Dh3.57bn) in additional revenues by increasing taxes in so-called ‘sin products’, such as tobacco and liquor.

“It’s the immediacy of the message that hits me,” adds the 47-year-old Bacaoco, who smokes a pack of Fortune a day.

“I do not know about the others, but for me it’s the immediate message that stares at me face-to-face.”

Even Fortune, which, at 15 pesos (Dh1.34) per pack is one of the cheapest cigarette brands around, can make a serious dent in one’s pocket, he adds, when the price goes up.

One pack contains 20 igarettes.

The bill says the total amount to be collected from sin taxes will be split 60-40, or 24 billion pesos (Dh2.14bn) from cigarettes and 16 billion pesos (Dh1.43bn) from liquor products.

The bulk of these taxes would be spent for the government’s healthcare programme, including the construction and upgrade of government hospitals across the country.

There are also health factors to consider, as excessive alcohol drinking, for instance, makes one susceptible to liver, cardiovascular, neurological, and psychiatric illnesses, according to Health Secretary Enrique Ona, who was quoted in news reports last August.

He also told reporters that the annual cost of the top four smoking-related diseases — lung cancer, chronic obstructive pulmonary disease, coronary artery disease and cardiovascular disease — in the country reached 177 billion pesos (Dh15.81bn) in 2011.
In the same year, he stressed, the government collected only 26 billion pesos (Dh2.32bn) in taxes from tobacco companies.

Gil Cruz, 42, who works as a company driver at Philex Mining Corp, Mr Bacaoco’s concerns on the impending price increase of sin products due to higher taxes.

“I am neither a heavy drinker nor a smoker of a pricey cigarette brand, but still I have to make some thinking about letting go of these vices, as I am a family man.”

The government is hoping that the number of smokers and drinkers in the country would lessen, as people would think about buying their basic needs first and, spending for their vices, later.

As in the case with Messieurs Bacaoco and Cruz, although not when one goes by the argument of Bernard Testa, a staff photographer with InterAksyon.com, a Philippine news online.

“I don’t think that an increase in the prices of cigarettes would really change a smoker’s habit —well, at least for me,” says Testa, 48, who used to work as a photographer in some English publications in Dubai.

“Maybe because I don’t smoke that much — only half a pack or less per day. So when I cut down on cigarettes, it’s maybe because of health reasons, not because of high prices.”

Maybe yes, but not for heavy smokers, like Rene Uy (not his real name).

The 58-year-old trader smokes about two packs of Marlboro Lights, which costs between 38 pesos and 45 pesos (Dh3.40-4) per pack, per day. “If the price will increase, it would be very costly already, don’t you think,” he says.

The 38-year-old Chito (he doesn’t like his surname published), on the other hand, doesn’t like to give some deep thinking about the Sin Tax reform bill, saying that, “I can’t do anything about it anyway.”

When egged on, however, Mr Chito, a taxi driver, says that doing away with smoking is easier said than done.

“What am I supposed to do after every meal and when I take short rests from driving? Even professional people, including the yuppies in Makati [Manila’s business district], would tell you that smoking helps them relax and think. In my case maybe it’s just to relax, but, seriously, go ask them.”

These men may have different opinions about smoking, but they agree on drinking: they will try to cut down on their drinking when the prices of liquor go up.

“They all smoke daily and drink occasionally, they say, so it would be easier for them to lessen their intake of alcohol, which is more costly than cigarettes, anyway. “Well, unless you’re a real alcoholic,” jokes Mr Chito, “then that’s a different story.”

Up in smoke
17.3 million Filipinos smoke
87,000 die of tobacco-related diseases every year
Philippines, whose population is over 90 million, is No 1 in smoking in Southeast Asia
Boys between 13 and 15 comprise 28.3 per cent of tobacco
Girls in the same age group make up 17.5 per cent