Philippines: BAT to Push Through with $200M Venture

Source from:  Malaya Business Insight  12/12/2012

Cigarette firm British American Tobacco confirmed (BAT) that it will push through with its planned investments of at least $200 million over the next five years, after the passage of the excise tax reform bill at the bicameral conference committee last Monday.

 

In a statement yesterday, BAT said that the final version of the "sin" tax bill will be beneficial to the country since it will generate additional revenues for the government which can be used to fund its social programs.

It added that the bill will also benefit the tobacco industry since players will be able to compete on a level playing field.
 
"It can -- we are confident it will -- open up expanded opportunities for the industry stakeholders, not only the manufacturers but distributors, retailers, employees and the tobacco farmers," BAT said.
 
The cigarette company is the manufacturer of several imported cigarette brands, such as Lucky Strike which is being sold in 7/11 stores since BAT returned to the Philippines in February this year.
 
The cigarette firm earlier said that it will put on hold their planned investments in the Philippines until the excise tax reform is passed into law.
 
The company announced that its planned investments will be used to develop, produce, distribute, and market its products in the country.
 
"In light of the latest developments, and in anticipation of President Aquino signing the bill soon, we confirm that we are investing at minimum US$200 million over the next five years," BAT said.
 
"We are looking forward to competing in the market and contributing to the growth of the Philippine economy," the company added.
 
The Senate and the House of Representatives came out with the latest version of the excise tax bill last December 10.
 
The reconciled version of the excise tax reform proposal is seen to generate P33.96 billion in revenues in the first year of its implementation.
 
In 2014, it is seen to create incremental revenues amounting to P42.86 billion; P50.63 billion in 2015; P56.86 billion in 2016; and P64.18 billion in 2017.
 
Finance Secretary Cesar Purisima also congratulated the Bicameral Conference Committee for the passage of the excise tax reform bill.
 
The Finance chief said that the measure corrects inequities in the tax structure that have plagued the system for decades. He added that these "inequities" have made the sin products cheaper than they should be.
 
"The version that was passed removes the price classification freeze that has pegged tobacco products to 1996 prices as the basis for their tax classification. It removes annexes that have unfairly favored brands introduced at an earlier date," Purisima said.
 
"This version provides for a unitary tax regime by 2017 for tobacco and fermented liquor, a shift from the current multi-tiered system that has allowed smokers to downshift to lower-priced products," the Finance chief said.
 
"It also indexes the tax rates of tobacco and alcohol by 4 percent every year so that these products do not become more affordable over time, consequently exposing the poor and the young to the harmful effects of smoking and excessive drinking," he added.Purisima said that this version will allow the collection of revenues needed to cover the financing requirements of the Universal Health Care program. Enditem