Philippines: BAT Hopeful on Sin Tax Measure Passage

Source from:  Manila Times  11/29/2012

The world's most international tobacco group expressed confidence that Congress will come up with the final version of the Sin Tax Bill that will provide a level playing field, which would allow the company to pursue its planned $200-milion investment in the country.

Robert Eugenio, British American Tobacco (BAT) head of corporate and regulatory affairs, said that their planned investment would be based on the excise tax regime to be passed by the House of Representatives and Senate.
 
The official noted that BAT still has several concerns over the approved version of the bill in the Senate, which based the tax payments made by tobacco companies this year on the classification of cigarette brands.
 
"This does not create a level-playing field," Eugenio added.
 
He said that the sin tax version at the Senate is "nearly unchanged" from the current system where 1996 brands are permanently classified regardless of an increase in net retail prices, but post-1996 brands are classified based on current retail prices.
 
Such system prevents new players from entering the market, as they would have to pay higher tax rates compared to older brands regardless if they are sold at the same price.
 
"But we are still confident in the bicameral that these issues identified could still be remedied," Eugenio told reporters.
 
On the other hand, he said that the version of the bill at the House of Representatives is "simpler and clearer," as it uses net retail prices as basis for classification of cigarettes--with those costing less than P11.50 falling under the low-price brands category and those amounting to P11.50, or more considered the high-price brands.
 
"Our position only is that . . . it doesn't matter how much is the rate for as long as everybody pays the same. If you are priced the same, you should pay the same rate," the BAT official said.
 
Eugenio stressed that their planned $200-million investment, which would be implemented over the next five years, would depend on the passage of the excise tax reform bill.
 
He also noted that concerns over the Senate version remain an issue whether the firm would roll out other cigarette brands in the country. At present, BAT is selling Lucky Strike cigarettes in the country.
 
"That's why we are concerned with particular provisions [of the Senate bill], because part of the plan is to introduce new brands as well," he said. Enditem