Friday, 02 March 2012 11:06
Malacanang assured that the proposed sin tax law is designed to provide competition among all players in the tobacco industry.
Presidential Spokesperson Edwin Lacierda issued the statement during the regular press briefing in Malacanang on Wednesday, in response to the issues raised by some lawmakers that the proposed measure will weaken the tobacco industry.
Lacierda pointed out that the proposed amendment to the structure of sin taxes collection will remove the barriers to competition.
"The sin tax reform pack is part of the LEDAC (Legislative Executive Development Advisory Council)," explained Lacierda. "The sin tax provides competition, right now the tobacco industry is controlled by one major player and it controls over 90 percent of the tobacco industry and it's Philip Morris."
Lacierda said the present rules have created practically a monopoly where one company has been able to control a market share of more than 90 percent.
"The sin tax reform will provide competition among the other players. In fact, that would increase the productivity or purchasing power of the tobacco industry," he said.
Aside from removing a monopoly in the tobacco industry, the proposed measure aims to rationalize the collection of sin taxes in the country to get more revenues for the government.
"We want to index the sin taxes to inflation. There are a number of reforms that we want to do," Lacierda said.
The government expects to earn P60 billion a year from the rationalization of taxes on alcohol and tobacco products.
Without such a bill, the finance department estimates that government will lose P2 billion to P2.4 billion a year by 2013.
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