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(School of Languages, Humanities & Social Sciences)
ENG10 A8
7:30 9:00 MWF
Research Paper

SCORE :__________
DATE :__________
The Sin Tax Bill

1. What is a Sin Tax?

A sin tax is a tax imposed on goods that are considered, in general, to be harmful to society.
The most common of these goods are alcohol and tobacco. Governments usually impose sin
taxes for two motives: revenue and healthto generate additional revenue for the government,
and to discourage and reduce the consumption of this product, protecting the health of their
people and saving lives.
2. Why Does the Philippines needs to amend its Sin Tax Law?
The current sin tax law is still based on the 1996 retail prices of tobacco products keeping the
cigarette prices of Big Tobacco (the oldest cigarette companies in the Philippines) at very low
prices. In fact, the Philippines is second only to Cambodia as having the lowest price for tobacco
in Southeast Asia. For example, a single cigarette stick can be bought for 3 pesos.
The passage of the Sin Tax Bill would eventually push the prices of tobacco products high
enough to reduce consumption, discourage the youth from smoking, and encourage adults to
quit. It will also give the government extra revenue to put towards Universal Health Care, while
also aiding tobacco farmers in shifting to alternative and perhaps even more lucrative sources of


1. How many Filipinos smoke?
The Philippines has one of the highest smoking prevalence among adults, and children aged
13-15 years old. Currently, 17.3 million Filipino adults are smoking 47.7% of men and 9.0% of
women. Smoking rates for women are also among the highest in Asia, second only to Japan and
the Republic of Korea. As of 2007, 27.3 percent of children aged 13 to 15 are also smokingthis
is a 40 percent increase in youth smoking prevalence since 2003! Studies have also shown that

the poor quintiles smoke significantly more than any other quintile, a dangerous reality as they
are also the least economically stable.
2. Why do we need to discourage people from smoking?
The general health of the public has been adversely affected by these high smoking rates. An
estimated 515 to 827 Filipinos contract smoking-related lung cancer, and lung and heart diseases
daily. In the Philippines, the top four killers of Filipinos cancer, heart disease, stroke, and
chronic pulmonary obstructive disease, are all smoking-related. The government pays P188
billion annually just to treat these four major diseases.
7 out of 10 leading causes of mortality are smoking-related. 87,000 Filipinos die every year
because of these smoking-related diseasesthat is equivalent to about 240 deaths daily, and 10
deaths an hour. About half of all tobacco-related deaths will occur between the ages of 35-69
resulting in a loss of 20-25 years of life for smokers versus non-smokers.
This is more than just a statisticthese are ten breadwinners, fathers, and mothers dying
every hour from smoking-related diseases, leaving families behind, and causing further burdens
to the delivery of health care services. It is especially important for us to discourage the youth
and the poor from smoking and drinking. Studies have shown that the adverse health effects of
smoking and drinking are worst for those who began these habits at a young age. The situation is
similarly dire for the poor, who are the most burdened by the costs of smoking.


1. What does the proposed Sin Tax Bill aim to do?
The primary goal of the proposed Sin Tax Bill is to care for the health of all Filipinos
through an increase in taxes, and consequently, an increase in cigarette prices, it aims to reduce
the consumption of cigarettesespecially for the youth and the poor, two sectors which are most
put at risk by this vice. Lives of Filipinos are at stake hereand to save lives is the primary
objective of this bill.
A significant amount of the revenue gained from increased taxes will go towards funding
quality healthcare, including the expansion of PhilHealth, the upgrading of health care facilities
and improving access to quality health care services, public health programs including research
and development to achieve the Millennium Development Goals, and the prevention of noncommunicable and lifestyle diseases. Furthermore, a portion of the incremental revenues will go
to alternative livelihoods for tobacco farmers.
So, while it is also a revenue measureand while it will also institute fair, equal measures
for all players in the tobacco marketit is first and foremost, a bill for the health of Filipinos.

2. Will the tobacco farmers lose their livelihood because of HB 5727?

Noand in fact, tobacco farmers stand to gain from the passage of the Sin Tax Bill.
At present, a conglomerate of Fortune Tobacco and Philip Morris has controlled the majority
of the tobacco market in the Philippines for the past 15 years. As the President said, the passage
of the Sin Tax Bill, and consequently, the imposition of a unitary tax will make the playing field
fair and competitive for all tobacco businesses, and not just the previously existing
conglomerate. This will provide tobacco farmers with a greater variety of consumers for their
products and will push the price of their products higher. In fact, British American Tobacco has
committed to invest $200 million over five years once the Sin Tax Bill has been passed.
Furthermore, statistics show that tobacco exports continue to grow. In only two years, from
2009 to 2011, exports have more than doubled, from $109,204,071 in 2009 to $218,936,014 in
This Sin Tax Bill also allots 15% of the incremental revenues gained from the increased taxes
on tobacco products to help tobacco farmers shift to alternative, and perhaps even more lucrative,
livelihoods. Specifically, the funds will be used to support tobacco farmers who shift to
production of other agricultural products, to support tobacco farmers who are displaced or who
cease to produce tobacco voluntarily, and to assist tobacco farmers to plant alternative crops or to
implement other livelihood programs.
3. What will happen to the workers of the cigarette manufacturing industry? Will they not
be displaced because of the decrease consumption (and productivity) due to tax
It is not true that tobacco workers will suffer due to tax increasesthese statements are
largely exaggerated. For context: tobacco-manufacturing employment comprises only 0.33% of
total employment in the Philippines. With that being said, workers in the cigarette manufacturing
industry stand to gain form the passage of this bill, much like tobacco farmers. Market
competition will intensify and added investments by players such as British American Tobacco
will lead to the creation of new jobs. The continued increases in the export of tobacco products
also means that, despite the increase in tobacco taxes, theres still much potential for growth in
the sector.


The numbers are clear: smoking and smoking-related diseases among Filipinos have
grown to alarming rates. 17.3 million Filipinos 15 years old and above are smokers. As of 2007,
almost 30% of teenagers aged 13-15 in urban areas have joined the ranks of smokersand this
represents a staggering 40 percent increase from the 2003 numbers.
515 to 827 Filipinos contract smoking-related lung cancer, and lung and heart diseases
every day. An estimated 10 Filipinos die every hour due to smoking-related diseases. Thats 240
deaths a day, and 87,000 a year. The further we go down the poverty line, the worse the scenario
gets: the poorer you are, the more susceptible you are to smoking-related diseases, and the more
difficult it is to get adequate healthcare. In spite of these facts, the Philippines remains one of the
cheapest places to get cigarettes in the world.
The fact of the matter is that the previous excise taxes on tobacco have not been able to
curb the increasing consumption of tobacco products. For instance, because of the outdated law
keeping the tax classification of the old and familiar cigarette brands frozen at 1996 prices, the
price of cigarettes has been kept to a minimum, when the price of true necessities such as food,
education, healthcare, and utilities have increased.
The primary goal of the Sin Tax Bill is to reduce the consumption of these sin products
while channeling a significant portion of the revenue gained to Universal Health Care. The Sin
Tax is, first and foremost, an Anti-Cancer Tax with the long-term goal of improving the health of
not just one single market, but the health of the entire nation.
The Sin Tax Bill is not about money. Let the accountants, executives, and Big Tobacco
companies squabble about pesos. We are here to save lives. The Sin Tax Bill is designed to
provide much-needed funds to health services. This is not a fight between smokers and nonsmokers; it is a fight to give Filipinos what they rightfully deserve: a healthcare sector that is
empowered and has the resources to truly care about our peoples health.