Philippines: Cigarette Makers ''Cheat'' on ''Sin'' Tax Payments

Source from:  Business Mirror 07/16/2013

AS the "sin" tax law marked its seventh month of implementation, anti-tobacco advocates on Monday slammed cigarette companies whom they said have developed strategies to undermine the health law to avoid paying higher tax.

Engr. Emer Rojas, Global Cancer ambassador and president of the New Vois Association of the Philippines (NVAP), said these strategies include "front-loading" their production in 2012 to avoid paying the higher tax rate in 2013 and conducting marketing campaigns that continue to target the youth.

Other tobacco companies have been selling their products at a loss or at a discounted price in order to introduce new products and gain foothold in the market.

All these strategies, he said, are to the detriment of the Filipinos.

"240 Filipinos. That is the number of lives smoking takes every day. The law aims to save lives. For the tobacco industry to find ways to circumvent the objective of the law is disrespectful to all the Filipinos who have been victimized and perished because of the addictive product peddled by the tobacco industry," Rojas said.

According to Rojas, tobacco companies have continued to target the youth and the poor to counter the price increase from the sin-tax law implementation.

An example, he said is a campaign that aggressively targets the youth, pretentiously "inspiring" teens who are struggling with their identity to stand up for what they believe in, with the underlying message: "If you want to smoke, just go for it."

Meanwhile, Irene Reyes, managing director of HealthJustice Philippines, said the sin-tax law could be considered as part of the total effort to protect the youth from tobacco and all consequential diseases it bring.

"The recent strategies employed by the tobacco industry clearly demonstrate its disregard for the well-being of the people, undermining the efforts of the Philippine government and civil-society organizations," she said.

The tobacco industry has been using smuggling as an issue to criticize the tobacco-tax increase, especially with the recent decrease in the government's excise-tax collections on sin products this March.

"Raising taxes is not directly linked to increased smuggling. Illicit trade is a multifactorial problem and not due primarily to higher tobacco taxes and prices," Dr. Ulysses Dorotheo, project director of Southeast Asia Tobacco Control Alliance Initiative on Tobacco Tax, said.

"Research shows that other factors such as the level of corruption in the country and lax implementation of laws are the true factors that affect cigarette smuggling.

In fact, many countries with high tobacco taxes have low levels of smuggling, while many countries with low taxes have high levels of smuggling," he said. Enditem