Sin Tax Analysis

ADVANTAGES
It discourages consumption of products which
are detrimental to health, such as cigarettes,
alcohol and even sodas and junk foods, thereby
creating a healthier society.
It also discourages involvement in morally
harmful activities, such as gambling and
prostitution.
It raises the internal revenue of the
government, which can be used for funding its
various programs (e.g., healthcare and
infrastructure) or payment of its nationaldebt.

DISADVANTAGES
It can trigger rampant smuggling and black
markets because of the consequential high
selling prices of the taxed goods or activities.
Since sin taxes are normally regressive in
nature (i.e., the amount of tax is the same for
both high-quality and low-quality products) the
lower class will only be the ones who will be
affected and not the upper class of the society.
Sin taxes may cause particular businesses to
incur losses, which may result to more job
layoffs.

Quotes from legislators

Bayan Muna Rep. Neri Colmenares said:
"The government has not provided a comprehensive
program for the support services, subsidy and
assistance to tobacco farmers. Tobacco farmers will
not benefit from the increase of retail prices of
cigarettes increase due to sin tax". Therefore, the
higher sin taxes will definitely negatively affect the
tobacco industry, which will result into
unemployment to huge industries like Fortune
Tobacco and the likes. (Bisyo: A special report on Sin
Tax, 2012)

Sen. Miriam Santiago's proposed reform:

"Santiago said that under her bill, 85
percent of the P60 billion would be used
for the government health program while
the remaining 15 percent for safety nets
that would ensure that tobacco farmers
can shift to more lucrative crops like
vegetables that have a bigger market
than tobacco" (Yamsuan, 2012).