House panel chair defends revenue target on alcohol products

THE chairman of the House committee on ways and means defended Thursday the chamber's version of the sin tax bill, which slashed the revenue target on alcohol products from P30 billion to P5.2 billion.

Senator Ralph Recto earlier insinuated that legislators in the House of Representatives were in cahoots with alcohol companies. "Did they make a deal with alcohol companies?" said Recto, who had resigned as chairman of the Senate ways and means committee.

"Sorry, no deal whatsoever. All committee hearings were done in public and members of the ways and means committee as well as stakeholders were present during the deliberations. No secret meetings were allowed and the bill was thoroughly debated both in the committee and in the plenary," Davao City Representative Isidro Ungab, the House panel chairman, said in a text message.

The Department of Finance had proposed a revenue target of P60 billion, P30 billion each from alcohol products and tobacco.

Under House Bill (HB) 5727 or the proposed sin tax measure principally authored by House appropriations committee chairman Joseph Emilio Abaya, now the Transportation and Communications Secretary, the revenue target from alcohol products was cut to P5.2 billion while the target from tobacco was trimmed down to P27 billion.

"The price range is very wide in the case of distilled spirits that is why we placed a three-tiered excise tax structure. We should have wanted to pass a unitary tax for both alcohol and tobacco but the tax burden may be too heavy for the local industry," said Ungab, as he explained the reduction of tax take from liquor.

HB 5727 provides three-tier tax rates of P20, P80 and P320 on distilled spirits such as whiskey, brandy, rum, gin and vodka; and two-tier tax rates for sparkling wines and champagnes of P250 and P700; and P13.75 and P18.80 on fermented liquors.

In Recto's committee report, which he later on withdrew, the senator recommended a sin tax bill that would raise only P15 billion to P20 billion government revenues; P9.8 billion to P14.8 billion from cigarettes, and P5.2 billion to P7 billion from alcohol products.

Bohol Representative Erico Aumentado, one of the authors of HB 5727, dared Recto to prove his allegation that alcohol producers lobbied for the slashed revenue target.

"His charge is nothing new as it is used by him as subterfuge after being criticized for his alleged 'Recto-Morris' dalliance. I can say with candor that there was no such capitulation by the House," he said in a text message.

House Speaker Feliciano Belmonte Jr., for his part, said he hopes that both chambers of Congress would be able to "strike a compromise" on the conflicting provisions of their respective sin tax bills.

"It's not that this is the final word, see, because the whole bill is open to scrutiny by the Senate and at that point the two of us will meet together and come out with a stand for the final version," he said in a press briefing.

Once both the House of Representatives and the Senate pass their versions of the sin tax bill, they will sit in a bicameral conference committee to reconcile conflicting provisions. (Kathrina Alvarez/Sunnex)