Hike 'sin tax "708% stuns Big Tobacco

708% tax increase on low-cost cigarettes in the country, as provided in the lower house approved a "sin tax" bill that has been described as "unprecedented," the head of the largest tobacco company in the country. Philip Morris Fortune Tobacco Corporation (PMFTC) President Chris Nelson in an interview Friday night with the ANC, said no other country in Asia is close to raising the tax rates that House Bill 5727 wants to impose on tobacco products in the Philippines. "If you look at the fact that the proposed increase in the rate of 708% of the low level (cigarette brands) for 2 years, 150% at the highest level, but on average it rises nearly 300%," says Nelson. "Seven hundred percent low, it is unprecedented. I can not think of a country that did it," he said. He said that tax increases will have a negative impact on tobacco farmers, workers, and the entire industry. "Let us not destroy this industry," he said. Nelson said PMFTC not against taxes, but also any additional tax should be moderate. He said that the tobacco giant formerly served on the increase in the level-P1 in 2004. "The reason is that we understand the dynamics of the market," he said. "We are not against raising taxes. In fact, Philip Morris is working with the government. What we have recommended a tax increase is sustainable for the industry and which provides future revenue to the government," he added. "We are looking for a moderate increase in taxes. We like that the increase will be, because we can plan the business," said Nelson. He said that the house Bill 5727, raising taxes on beer ranges from 8% to 32%. "This is what we call a moderate increase in contrast to 700%," he said. Implications PTFMC said that if the Senate will adopt similar measures HB 5727 and the proposal signed into law the President Benigno Aquino, a cigarette manufacturer expects 50% drop in the demand for tobacco for domestic consumption. This, in turn, affect the livelihoods of about 22 000 farmers across the country, the company said. It can also lead to oversupply of domestic capacity and affects the work. Nelson said PMFTC, of course, reduce the number of its employees, which now number about 3,000. He also believes that the bill was a sin tax, after its adoption will lead to an increase in cigarette smuggling and counterfeiting. "We already have a cigarette smuggling on the island of Mindanao. We already have brands that are coming up for retail sale in P5. There's a fake, even on my own brands," he said. "If we assume that taxes will go to 100% and 700%, that (smuggling, counterfeiting) is significantly increased. Problem will grow massively," he warned. Nelson said that the struggle for the "sin tax" measure now moves to the Senate. "I think we did a lot of good representation (in the lower house). Unfortunately, the whole process was interrupted, and we proposed some amendments which were not taken," he said. "But obviously, (we) hope that the debate will continue and, obviously, to participate in the Senate." Praise for hiking "sin tax" Effect of economic reforms (AER), a non-governmental watchdog, which insists on reforms in sin taxes, previously praised lawmakers for approving House Bill 5727. He said that the bill, as amended, "corrects all errors of law." "Representative Isidro Ungab, chairman of the Ways and Means Committee, have done their homework. He is not only a brilliant engineer, a landslide vote for the bill at the committee level Abaya. With his good-natured appearance, he was very convincing in defending Bill and parry the arguments of vested interests, "said AER. The group said opponents of the measure can not contest the health argument is that the sharp increase in tax will significantly reduce the consumption of tobacco and alcohol, thus reducing the problems associated with smoking and excessive alcohol consumption. AER said the high tax rate for low-cost brands of cigarettes will deter young smokers and the poor, or starts to smoke, or force them to quit. According to the AER Jo-Ann Latuja, the retail price for PTFMC production will increase by 76% in the first year, if the "sin tax" bill becomes law. "Studies have shown that a 10% increase in cigarette prices in the Philippines will reduce consumption by 5%. With 76% price increase, consumption will decrease by 44%," said Latuja. The group also believes that higher taxes on tobacco and alcoholic beverages will a sharp increase in smuggling and counterfeiting. Quoting the Commissioner of Customs Ruffy Biazon, AER said that the price of the most popular tobacco brand in the country - Fortune International filtra Kings - will rise to P35.26 per pack in 2014. Price will still be lower than that in 2009 the price of cigarettes sold in Cambodia (P52.36), Indonesia (P64.68), Thailand (P103.84), Malaysia (P146.08) and Singapore (P365.2), in Depending on the group. Again referring to Biazon, AER said contraband cigarettes only stem from - and not - in the Philippines, if House Bill 5727 becomes law. Tax revenues on health, tobacco Budget Secretary Florencio Abad, also welcomed the approval of the bill in the lower chamber. "Through this innovative step, we are much closer to reforming the current tax regime for tobacco and alcohol products, which for over 15 years and has been ineffective and outdated," he said in a press statement. He said the new "sin tax" increase the efficiency of the tax system in the country, and to increase state revenues by about P33 billion in the first year of its implementation. He said that most of the revenue will be collected by raising taxes on tobacco and alcohol will go to health care. "Following the approval of 15 percent of the income tax would be a sin also be used to support the tobacco manufacturers, which could adversely affect the measure," said Abad. "Tobacco-and non-tobacco growing province will also have a share in the revenues from the excise tax regime updates. In its original form, HB 5727, is expected to generate at least P60.7 billion, which will be sent to the beneficiary's 81 provinces. This is far from the 16 provinces are now supported by the present excise tax scheme, "he added. "More importantly, however, the restructuring of the sin tax would go a long way toward improving the health and welfare of Filipinos. Currently, tobacco and alcohol products are very low retail prices in the country, and an updated scheme of sin taxes contribute to the prevention of Filipinos, especially the young to participate in unhealthy habits, "said Abad. Search for professional Russian translation Google Translate for Business: Translator Toolkit Website Translator Global Market Finder