Sin Tax is a revenue enhancement levied on merchandises or activities. which are considered iniquitous or harmful and considered as objects of societal disapproval. such as spirits and baccy. Sin revenue enhancement or sometimes called sumptuary revenue enhancement is meant to cut down the ingestion of those merchandises or services by taxing them. aside from the common gross revenues revenue enhancement. to do them more expensive. less low-cost and less accessible by consumers.
Harmonizing to the Department of Health ( DOH ) . the Philippines has an estimated 17. 3 million baccy consumers. the most figure of tobacco users in Southeast Asia. Filipinos on mean consume 1. 073 coffin nail sticks yearly. while the tobacco users in the part consume less than a 1000 sticks annually. This high ingestion rate is seen as a consequence. among others. of the really low coffin nail monetary values in our state.
Smoke is responsible for 71 per centum of lung malignant neoplastic disease deceases in the universe. Consequently. lung malignant neoplastic disease is the taking signifier of malignant neoplastic disease in the Philippines. DOH statistics reveal that 10 Filipinos die every hr because of smoke.
Harmonizing to the DOH. a 10 per centum addition in baccy revenue enhancements will cut down the figure of tobacco users by two million by 2016. A important diminution in the figure of tobacco users will likewise cut down the figure of smoking-related deceases.
Meanwhile. imbibing intoxicant. though effects are comparatively less terrible health-wise than smoke. has posed a figure of costs on the person and society.
House Bill 5727. normally known as the Sin Tax Bill and now the Sin Tax Reform Act of 2012. restructured the revenue enhancements imposed on intoxicant and baccy goods patterned since its last amendment. Duties on these merchandises are a possible gross beginning that will assist fund the Universal Health Care Program of the disposal. Likewise. higher taxes—and accordingly higher costs—are seen as a hindrance to the ingestion of “sin” merchandises. whose inauspicious effects are largely borne by the poorer sections of society. It is like hitting two birds with one rock. The transition of the excise revenue enhancement reform on baccy and intoxicant therefore marks a historic triumph for wellness and gross reform in the Philippines for five chief grounds.
First. the step achieves all indispensable reforms by rectifying unfairnesss in revenue enhancement construction that have plagued the system for decennaries. These unfairnesss have made wickedness merchandises cheaper than they should be. to the hurt of public wellness aims.
The version that was passed removes the monetary value categorization freezing that has pegged baccy merchandises to 1996 monetary values as the footing for their revenue enhancement categorization.
This version removes extensions that have below the belt favored trade names introduced at an earlier day of the month.
This version provides for a unitary revenue enhancement government by 2017 for baccy and fermented spirits. a displacement from the current multi-tiered system that has allowed tobacco users to downshift to lower-priced merchandises.
This version indexes the revenue enhancement rates of baccy and intoxicant by 4 % every twelvemonth so that these merchandises do non go more low-cost over clip. accordingly exposing the hapless and the immature to the harmful effects of smoke and inordinate imbibing ;
Second. the excise revenue enhancement incidence for baccy merchandises jump from a measly 29 % in 2012 to a respectable 63 % by 2017. stopping point to the international criterion recommended by the World Health Organization and the World Bank that baccy merchandises be taxed excise at two-thirds their net retail monetary value.
Third. this version will let a aggregation of P33. 96 billion in incremental grosss from baccy and intoxicant for this twelvemonth and P184. 31 billion over the following four old ages. adequately covering the funding demands outlined by the Department of Health for the Aquino administration’s Universal Health Care plan.
Fourth. the excise government for distilled liquors will be compliant with World Trade Organization criterions by following a assorted system of P20 NRP per cogent evidence litre specific revenue enhancement + 15 % NRP per cogent evidence ad valorem in 2013 and 20 % NRP per cogent evidence in 2015. and holding removed natural stuffs from the current footing of revenue enhancement categorization. BACKGROUND ON HEALTH
By now the wellness jeopardies of smoke and baccy usage are good known. Smoke is the major subscriber to many types of malignant neoplastic disease. bosom disease and other serious or potentially fatal conditions that are the main cause of decease of Filipinos. Cigarettes contain more than 4000 chemical compounds and at least 400 toxic substances. When you inhale. a coffin nail burns at 700°C at the tip and around 60°C in the nucleus. This heat breaks down the baccy to bring forth assorted toxins. As a coffin nail Burnss. the residues are concentrated towards its butt. The merchandises that are most detrimental are: pitch. a carcinogen ( substance that causes malignant neoplastic disease ) . nicotine is habit-forming and increases cholesterin degrees in your organic structure. C monoxide reduces O in the organic structure. constituents of the gas and particulate stages cause chronic clogging pneumonic upset ( COPD ) .
It is given that tobacco users are more likely to acquire malignant neoplastic disease than non-smokers. The most related malignant neoplastic disease with regard of the ingestion of baccy merchandises are lung malignant neoplastic disease. pharynx malignant neoplastic disease. and mouth malignant neoplastic disease. which are non normally seen on non-smokers. Surveies show that 1of the 5 nut tobacco users ( who smoke about 15 sticks mundane ) will decease of lung malignant neoplastic disease. The well-known chemical of a coffin nail. Nicotine. plays a large function on doing kidney malignant neoplastic disease and vesica malignant neoplastic disease. The most common ( and the most expedient manner ) to acquire nicotine and other drugs into your blood stream is through inspiration — by smoking it. Your lungs are lined by 1000000s of air sac. the bantam air pouch where gas exchange occurs. These alveoli provide an tremendous surface country — 90 times greater than that of your tegument — and therefore supply ample entree for nicotine and other compounds. Once in your blood stream. nicotine flows about instantly to your encephalon. Although nicotine takes a batch of different actions throughout your organic structure. what it does in the encephalon is responsible for both the good feelings you get from smoking. every bit good as the crossness you feel if you try to discontinue. Within 10 to 15 seconds of inhaling. most tobacco users are in the throes of nicotine’s effects. Nicotine is besides metabolized in your lungs to cotinine and nicotine oxide and it goes along with ruddy blood that are responsible on administering gas addendum on the different parts of our organic structure. The staying nicotine is filtered from the blood by your kidney and excreted in our piss. In this procedure. malignant neoplastic disease on kidney and vesica can be developed.
In tobacco users. the rate of diminution in lung map can be three times the usual rate. As lung map diminutions. shortness of breath begins. Chronic clogging pneumonic disease ( COPD ) is a corporate term for a group of conditions that block air flow and do external respiration more hard. The emphysema – shortness of breath caused by harm to the air pouch ( air sac ) is one of the conditions under COPD. Another status under COPD is the chronic bronchitis – coughing with a batch of mucous secretion that continues for at least three months. Smoke is the most common cause of COPD and is responsible for 80 % of instances. It’s estimated that 94 % of 20-a-day tobacco users have some emphysema when the lungs are examined after decease. while more than 90 % of non-smokers have small or none. COPD typically starts between the ages of 35 and 45 when lung map starts to worsen anyhow. There is a list of other hazard that is caused by smoking like high blood pressure ( high blood force per unit area ) – a hazard factor for bosom onslaughts and shot. The blood vass in the oculus are sensitive and can be easy damaged by fume. doing a bloodshot visual aspect and itching. Smokers take 25 per cent more sick-day-year than non-smokers. Smoking besides affects your expressions: tobacco users have paler tegument and more furrows. This is because smoking reduces the blood supply to the tegument and lowers degrees of vitamin A.
On the other manus. spirits or intoxicant ingestion is one of the topics of the reform. Excessively much alcohol consumption can do terrible conditions that may take to decease. These conditions if non long term disease. it is a 1 it combo that will be your life. Studies show that most of vehicle accidents occurred is related to alcohol ingestion. Alcohol lowers the blood sugar degree and is harmful to the encephalon. It might even do irreparable nervus harm. The one organ that is largely affected by imbibing is the liver. Basically liver is capable of change overing intoxicant into other compounds rendering them harmless to the organic structure. Liver cells synthesis fat from surplus intoxicant which is deposited in hepatic cells. This deposition disturbs protein synthesis and transition of animal starch. Excessive accretion of fats disturbs the enzyme production and the status is known is fatty liver syndrome. In progress phases fatty cells accumulate so much that it causes liver cirrhosis. Alcohol intake consequences in dilation of peripheral blood vass. This is due to the oxidization of intoxicant and the attendant production of heat. Due to constant dilation the arterial walls get damaged which has an consequence on the bosom. Besides. intoxicant ingestion has a harmful consequence on kidneys besides as they have to make excess work to extinguish surplus of H2O. Excessive intoxicant consumption might bring on loss of memory. RATIONALE OF THE ACT
1. To advance wellness by detering frailty.
2. To roll up more gross for health care.
Content
There are really 8 major deductions of the amendments on the Sin Tax Law. First is the remotion of the monetary value or trade name categorization freezing. The proper revenue enhancement categorization of intoxicant and baccy merchandises will now be determined every two ( 2 ) old ages.
Second. there is a gradual displacement from the multi- tiered construction to a unitary revenue enhancement which means that there would be a simplified categorization of the aforesaid merchandises. Alternatively of its old categorizations ( for baccy merchandises. there were really 4 categorizations. now it would merely be classified as either less than P11. 50 or more than P11. 50 ) . a unitary revenue enhancement would be used to forestall downshifting to take down priced trade names. to deter ingestion of wickedness merchandises. and for easier revenue enhancement disposal.
Third. there would be one-year indexation of excise revenue enhancements to forestall the excise revenue enhancements to be eroded by rising prices. The authorities would be doing certain that the excise revenue enhancement would be comparative and relative to the linking of rewards. pensions. or other wage to an index stand foring the cost of life. so that they are automatically adjusted up or down as the demand arises.
Fourth. the reform conforms to the World Trade Organization governing on the monetary values of distilled liquors which corrects our non-conformity before to extinguish prejudiced systems of revenue enhancement. It sets the ad valorem revenue enhancement rate of 15 % of the NRP per cogent evidence and a specific revenue enhancement of P20 per cogent evidence.
Fifth. the amendment would intend coevals of more grosss for the authorities. On the first twelvemonth of execution. the authorities is expected to raise extra grosss deserving P33. 96 billion. of which P23. 4 billion is from coffin nails. P6. 06 billion from distilled liquors and P4. 5 billion from fermented spiritss.
Sixth. it would besides supply for an extra support for baccy farmer’s support support. Section 8 of the jurisprudence provides that. “15 % of the incremental gross collected from the excise revenue enhancement on baccy merchandises under R. A 8240 shall be allocated and divided among the states bring forthing burley and native baccy which shall be entirely utilised for plans to advance economically feasible options for baccy husbandmans and workers. ”
Seventh. there would be higher wellness attention disbursement. 80 % of the staying incremental values will be allocated for the cosmopolitan wellness attention plan under the National Health Insurance Program and 20 % will be allocated countrywide for medical aid and wellness sweetening installations plan. This means that there would be fiscal hazard protection thru registration to Philhealth – therefore basking extended benefits entitlements and decreased out-of-pocket disbursals and entree to affordable and quality wellness attention services.
Last. the reform would advance wellness more extensively by detering frailties therefore decrease of baccy and intoxicant ingestion leads to better wellness results. The reform envisions a healthy Filipino society.
With these reforms. all Filipinos. particularly the young person and the hapless will be protected even more. Table OF THE RESTRUCTURED SIN TAX
RESTRUCTURED SIN TAX|
| 2013| 2014| 2015| 2016| 2017|
TOBACCO ( per battalion ) |
Less than P11. 50| P12. 00| P17. 00| P21. 00| P25. 00| P30. 00| P11. 50 and more| P25. 00| P27. 00| P28. 00| P29. 00| P30. 00| FERMENTED LIQUOR ( per litre ) |
Less than P50. 60| P15. 00| P17. 00| P19. 00| P21. 00| P23. 50| P50. 60 and more| P20. 00| P21. 00| P22. 00| P23. 00| P23. 50| DISTILLED SPIRIT ( specific per cogent evidence litre + ad valorem per cogent evidence ) | NRP per proof| P20. 00 + 15 % | P20. 00 + 15 % | P20. 00 + 20 % | P21. 80 + 20 % | P21. 63 + 20 % |
UNIVERSAL HEALTH CARE
The entire cost of cosmopolitan health care ( UHC ) which the reformed jurisprudence seeks to counterbalance from 2012 to 2016 will amount to P682. 1 billion. The national government’s funding demand for the following five old ages amounts to a sum of P224. 8 billion or a 33 per centum portion in the UHC cost. Additional grosss to be brought approximately by the wickedness revenue enhancement reform are being viewed as one of the chief beginnings for UHC national authorities funding. It specifically states that P92. 7 billion will account for the national authorities covering for a 100 per centum subsidy for the premium of 5. 2 million or the bottom 20 per centum of the poorest households. P55. 3 billion will account for a 50 per centum subsidy for the following 5. 6 million of hapless households ( the other half will be funded by the local authorities ) . P76. 8 billion will account for investing subsidies in the wellness sector. ADDITIONAL REVENUES TO BE BROUGHT ABOUT BY THE SIN TAX REFORM AMOUNT| PURPOSE|
P92. 7 B| 100 % subsidy of the poorest 5. 2 million families| P55. 3 B| 50 % subsidy of the following 5. 6 million poorest families| P76. 8 B| Investment subsidies in the wellness sector|
ISSUES AND CONCERNS
The rise of a good thing will be the rise of its bad things. The jurisprudence had its campaign for at least 16 old ages. The Sin Tax Reform Law has been in the procedure of 16 old ages in the devising. Economic Expert and Political Critic Ms. Winnie Monsod stated that the ground behind the long term procedure undergone by the jurisprudence is because of the strong lobbying attempts of the Anti-Sin Tax Reform groups. The procedure of buttonholing for this reform made decisions and guesss that there is an bing issue on corruptness and graft. Strong anteroom money can be one of the indicants that Philippine Decision-Makers are corrupt and can easy be bribed as stated by Philip Morris International. one of the taking baccy companies.
The proposed reform passed the lobbying procedure. at last on December 20. 2012 when President Aquino signed the jurisprudence. The 1s who wanted this reform had a glance of triumph. The measure had its existent conflict in the Congress. The Tobacco Industry raised statements that made the argument on this measure hotter than the argument on the anteroom system. Such issues are the menace on a rapid displacement of baccy husbandmans to other harvests and as consequence. the production of baccy merchandises will diminish and that there would be rapid smuggling. The Tobacco Industry particularly the Fortune and Philip Morris Corporation is the biggest company who insisted that these reforms be rejected. One of the strong points of the authorities was the protagonism on a healthier Filipino society. Survey shows that 89. 000 people die every twelvemonth because of sin merchandise ingestion. Besides. of the 10 prima causes of decease here in the Philippines. 7 may be attributed to transgress merchandises. There is 18 % of our population who smokes and most of these people came from a financially challenged household. It is so dry to believe that largely those who smoke are the 1s who are non fiscal capable to do their tobacco-caused disease be treated.
As a consequence of the Reformed jurisprudence. there is a jutting displacement of farmer’s production harvest. from baccy to another. As an consequence. production on baccy merchandises will diminish every bit good as its ingestion. It is good for those who are in favour of the anti-smoking protagonism. However. on the portion of the baccy companies. it is unprofitable. For the nut tobacco users. if there will be low production. it is either they change their life-style and bit by bit decrease their ingestion or they prefer to force through with their impulse to smoke and as a consequence. there may be a rise of smuggling. Effectiveness
The excise revenue enhancement of baccy and intoxicant merchandises has a long history. It has shifted from. specific. compound. to ad valorem. and so back to particular. Even with these different reforms. both industries have survived for decennaries. Consumers of these merchandises have continuously sustained the being of the intoxicant and baccy industry. On the other manus. baccy husbandmans who might be displaced by the reform and are forced to switch seting other harvests or other support enterprises will go on to portion in the incremental values. The jurisprudence provides that a portion of the grosss will travel towards farmer support plans. It was signed into jurisprudence on December 20. 2012 and became effectual last January 1. 2013. The implementing regulations and ordinances were issued on December 21. 2012.
