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Tobacco-alcohol tax burden ratio is 69-31 By Norman Bordadora Philippine Daily Inquirer 3:15 am | Saturday, December 8th, 2012

Industry killer Marcos comes from the tobacco-producing province of Ilocos Norte. Its 70-30 in 2013, but as time goes by, every following year, the burden of the tobacco industry would increase while that of the alcohol industry would remain the same, Marcos told reporters after the bicameral meeting held at the House of Representatives on Thursday. I dont agree at all. But they dont care. And the fact of the matter is that in that kind of burdensharing, in that kind of pricing, they will kill the industry. They will put 2.5 million people out of work. I dont know if that is their intention but that will be the effect, the Ilocano representative added. According to Drilon, the incremental revenues from tobacco as agreed upon in the bicameral panel would be P23.4 billion in 2013, P29.56 billion in 2014, P33.52 billion in 2015, P37.09 billion in 2016 and P40.9 billion in 2017. The total additional revenues from tobacco would be P164.47 billion for five years. It will be noted that insofar as the Senate version is concerned, the expected revenue which was approved by the senators is P23.55 billion in 2013. What we finally agreed upon is lower by 100 to 150 million pesos, Drilon said. No killer Drilon said that while what the bicameral panelapproved revenue targets for 2014 through 2017 are higher than those passed by the Senate, the bicameral figures are not significantly higher. Contrary to Marcos statements, Drilon said the tax rates on tobacco wont kill the industry.

He said that the tobacco industrys burden in terms of actual taxes to be paid was even lower than the Senate version. If Senator Bongbong approved this version in the Senate of P23.55 billion theres no reason for him to disapprove P23.4 billion, Drilon said. Earmarkings for the proceeds of the revenues, Drilon said, would be discussed on Monday. He, nonetheless, said there was a move by the House members to do away with the earmarkings as making allocations was the function of Congress budget process. Liquor, Tobacco Taxes Up BIR Issues Tax Rates For Various Brands Of Sin Products By JUN RAMIREZ January 2, 2013, 7:27pm MANILA, Philippines --- The Bureau of Internal Revenue (BIR) came out on Wednesday with an additional and detailed guideline implementing higher excise taxes (ad valorem and specific) on the socalled sin products. Revenue Commissioner Kim S. Jacinto-Henares instructed all manufacturers and importers of alcohol and tobacco to get a copy of the 19-page Revenue Memorandum Circular No. 90-2012 which contained applicable tax rates for every brand of their products as prescribed under the mother Revenue Regulations No. 17-2012 issued last week. It is available at the BIR website, www.bir.gov.ph. The circular contained the names of the 629 brands of liquor and 267 cigarettes which are either imported or produced locally and are available in the local market. For both fermented liquors (beer) and distilled spirits (whisky, brandy and rum) the tax is on per liter basis.

For instance, specific tax on the popular San Mig Light beer is around P7 per bottle, or P20.57 for every three bottles which is equivalent to one liter. For cigarette, the collection of the specific tax is more simplier as the revenue regulations imposed only two schedules. These are P12 for those retailed at P11.50 and below and P25 for higher amounts. The tax rates for both liquor and cigarettes were based on a 2010 BIR price survey. Meanwhile, Ms. Henares has reshufled six key field officials to continue strenghteing the tax collection program of the bureau. Among those given new assignments were Gerry Florendo from chief of the excise division of the Large Taxpayers Service (LTS) to director of Revenue Region No. 5 based in Caloocan City, South Quezon City Revenue District Officer Clavelina Nacar to assistant revenue regional director of Southern Tagalog and Teresita Angeles, chief of staff of the Resource Management Service to chief of the LTS excise tax division. Meanwhile, putting a stop to cigarette smuggling is on top of the 2013 agenda of the Bureau of Customs (BOC) following the implementation of the Sin Tax Reform law. My own target now is to do some apprehensions on cigarettes, said Customs Commissioner Ruffy Biazon. Biazon said the BOC will not only look at smuggling of cigarettes into the country but also the smuggling of cigarettes from the Philippines to other countries. Our problem actually is also the concerns of other countries. That is smuggling of cigarettes from the Philippines, he said. He said even after the imposition of higher taxes, local retail prices of cigarettes remain lower than in other countries, making them cheaper to buy here and then sell abroad and this offers an opportunity for smugglers to profit.

He said these cigarettes are smuggled in boats across the border of Mindanao particularly in the provinces of Zamboanga and Tawi-Tawi. Biazon said the BOC has all the reasons not to lower its guard on cigarette smuggling. We aim to apprehend to gain the confidence of the government to address that, he said. (With a report from Raymund F. Antonio) Cigarettes disappearing from shelves in Mindanao areas By Allan Nawal Inquirer Mindanao 8:08 pm | Thursday, January 3rd, 2013

DAVAO CITY, Philippines Cigarette smokers continue to find it hard to buy their favorite brands here and in other parts of Southern Mindanao as of Thursday as most wholesalers and retailers claim there was still scarcity of supply. Major cigarette brands started to disappear from stores shortly after Christmas, less than a week before the Sin Tax Law came into effect. The department manager of a major mall and grocery store here, which has branches in various Mindanao and Visayas areas, said they had ran out of stock and that their sources had indicated early on that supplies would be available by next week yet. All our branches in Mindanao and Visayas have no stocks now, the manager, who declined to give her name due to lack of authority to speak on the matter, said. She said not only cigarettes have disappeared from their inventory but alcoholic drinks as well, such as the more popular Emperador Lights and Tanduay Rhum. By next week, the supply could return to normal but the prices would be higher than usual, the manager said. She said the price increase was caused by the implementation of the Sin Tax Law.

In another mall here, which sold Marlboro Red 20s at P308 per ream (one ream contains 10 packs) before Christmas, stocks started to show up Thursday. But a price check revealed that per ream now sells at P400.40. A cashier told the Philippine Daily Inquirer that the stocks were new and were being sold based on the manufacturers suggested retail price. Renier, 40, a smoker for more than 20 years now, said buying from big grocery stores was cheaper for him but it was difficult to find his brand. He said his cigarette brand, Fortune, was being sold at the neighborhood store for P1.65 per stick or P33 per pack, up P18 from last months P15 per pack. I still buy. I cant stand [not] smoking especially after eating, Renier, a government worker, said with a wide grin. David Selma, a barber, said he had been trying to shift to cheaper brands since his brand, Philip Morris, became so expensive. From last years P40 per pack at a store near his shop, Philip Morris now sells at P55 per pack. I have tried Bowling Green menthol and still could not adjust, but its far cheaper at P30 per pack, he said. Francis Balong, another smoker, said he was surprised on Christmas Day to find his cigarette brand suddenly gone from the shelves of a favorite grocery store. I bought one pack in the morning and returned before sunset to buy another pack, only to find out they had no more stocks, including that of other brands. That was unbelievable because when I bought one in the morning, they still had a lot of cigarettes on display, Balong said. He said he suspected that the store had withdrawn the cigarettes from display in anticipation of the price increase this month. Maybe they hid their stocks, Balong said.

Internal Revenue chief Kim Henares had admitted during an interview by a Manila-based radio station on January 1 that the disappearance of cigarettes and alcoholic drinks from store shelves could be blamed on hoarding by some retailers. Actually they took advantage. Some people, what they did, they purchased and stockpiled projecting that there would be an increase in prices on January 1, she said. In an interview later by ANC, Henares bared that the Sin tax Law did not cover prior stocks. Only new stocks delivered by manufacturers, she said. But while retailers have started to make a killing from selling stocks they bought cheaper last month at a much higher price these days, Henares admitted that the government cannot run after them. Cigarettes and alcohol are not considered basic commodities so there is no price control for such products. Nobody can be held liable for hoarding as far as these are concerned, she said. Henares said the only thing the government can do is to tax them based on their declared income from selling these items.