Sin taxes

CLOSE on the heels of the country’s need for food is some people’s tolerated habits—-or vices? Since we are unable to wean people away from these habits, our leaders in business and government have decided to make money from them. And so, the so-called “sin-taxes” was born.

A few days ago, the Department of Finance (DOF) revealed that from the sin taxes alone, it expects to collect “at least P31.35 billion” in additional revenues. This once amendments to the sin taxes law are passed this year.

Consumption of sin products are made by people from all levels, both from the sophisticated urban centers to the outlying areas of the countryside. The DOF data shows that the bulk of the total incremental revenues will come from cigarettes at P26.87 billion, followed by P3.03 billion from fermented liquor and P1.45 from, distilled spirits.

It is said that from 2014 to 2016, the additional revenues will gradually rise to P39.02 billion in 2014, P42.68 in 2015, and P41.51 in 2016. The DOF estimate states that on cigarettes alone, the government’s take would amount to P35.38 billion in 2016.

Indeed, during a recent presentation in the Senate, DOF officials revealed that the excise tax alone on cigarettes with net retail price of less than ten pesos in December 2010 was P2.47, but without a price class freeze, the amount would have been still higher at P11.43 or P8.96 higher.

In the case of distilled spirits, additional revenues for 2014 will reach P1.78 billion, and P2.62 billion and P3.03 billion respectively over the succeeding two years. Truth is, according to DOF officials, the government could have collected more revenues if there was no such price freeze since 2006.

It thus appears clear that a majority of the Filipino people had somehow subsidized the bad habits of our drinking and smoking people from all over the country. I do not know how the price freeze came to pass, or who among the manufacturers of “sin” products could have influenced our leaders in government in 2006 to initiate the price freeze. It was a master stroke.

The revenues which the government would have collected from the sales of sin products since 2006 “could have been used on health-related services,” but because of the price freeze, how many poor people in the country were unable to get medical services from the government, or even lost their live from failing to get medical assistance from the government?

Well, the point is that we live in a democratic and open society where competitive consumerism is a way of life of the people. And manufacturing of sin taxes is a profitable way of living.