Lawmakers Dismiss Illicit Tobacco Report as ''Without Merit''

Source from:  Manila Bulletin 07/28/2014

Three lawmakers yesterday strongly criticized Philip Morris for using what they described as a "meritless" study to deceive the public and policy makers in an effort to regain control of the country's multibillion-peso tobacco industry.

Batangas 2nd District Rep. Raneo E. Abu, vice chairman of the House ways and means committee and a member of the Congressional Oversight Committee on the Comprehensive Tax Reform Program, said, "we cannot rely on questionable studies used as references to fabricate scenarios about our local industries."

Deputy Speaker Sergio F. Apostol of Leyte's 2nd District said "studies like these are meant to discredit the effectivity of the existing Sin Tax Law that has benefitted the government and its health reform programs."

They cited as an example the "Asia-11 Illicit Tobacco Indicator 2012" done by the International Tax and Investment Center (ITIC) and the United Kingdom-based Oxford Economics (OE) which claimed the government was supposedly losing P15 billion in foregone revenues from illicit trade in the tobacco industry.

They said the study, commissioned by Philip Morris Asia Ltd. (PMAL), clearly illustrated a tainted business climate for the tobacco industry in Asia and elsewhere in the world to deceive the public as well as its own investors about the real state of its markets in the region.

First District Rep. Rodolfo Albano III, who represents Isabela, one of the tobacco-growing provinces, said "this is clearly a dirty tactic to justify that there is a flaw in the existing Sin Tax Law and influence legislation to amend it while Bureau of Internal Revenue statistics say otherwise."

The Southeast Asian Tobacco Control Alliance (SEATCA) discredited the study by describing it as "more myth than fact" and "uses flawed methodology, and results in skewed findings supportive of the tobacco industry's positions on taxation."

SEATCA Director Bungon Rithiphadee revealed that the authors of the study have done road shows to release it in individual countries to provide greater publicity to the findings and reach policy makers.

SEATCA said that the study's merit is questionable because major transnational tobacco companies including Philip Morris International (PMI) sponsor one of its publishers, the ITIC, despite its declaration as an independent non-profit research and education foundation.

Together with OE, the Asia-11 report, "while being presented as an independent study, was funded by PMI, prepared by ITIC and OE according to agreed terms of reference provided by PMAL, and relied on inputs and data given by the tobacco industry, cannot be considered as a neutral stakeholder on this issue," SEATCA revealed.

SEATCA is a Bangkok-based multi-sectoral group that focuses on improving tax systems and health measures for tobacco control in Thailand, Cambodia, Indonesia, Laos, Philippines, Vietnam and elsewhere in the region.

Dr. Frank Chaloupka, a noted professor at the Illinois University in Chicago and an expert economic analyst, said "The authors themselves seem to acknowledge this by stating clearly in their disclaimer: The purpose of the report is to serve as a public policy resource pursuant to ITIC's mission. Nevertheless, should any party choose to rely on the report, they do so at their own risk. ITIC and OE will not accept any responsibility or liability in respect of the report."

In a related development, national survey results published by the Department of Health (DOH) has debunked claims by a multinational cigarette manufacturer that the government is losing billions from illicit tobacco trade.

The DOH, together with the Department of Finance, Bureau of Internal Revenue, World Health Organization and World Bank, presented results of a national survey conducted by the Social Weather Stations, Inc. (SWS) showing the effectiveness of the Sin Tax law in reducing smoking prevalence among the youth and the poor.

The survey revealed that smokers belonging to the Socio-Economic E class or the very poor dropped by 13 percent and those belonging to the 18 to 24 year-old age group also decreased by 17 percent. Enditem