Former National Economic and Development Authority director-general Romulo Neri dismissed arguments that a two-tier excise tax system proposed under House Bill No. 4144 is an anti-health measure.
Pro-health advocates opposed the proposed amendment, noting that smokers’ projected downshifting will negatively impact on the bill’s intention to curb smoking prevalence.
Neri said “while some downshifting from premium brands to cheaper ones is expected to happen under a non-unitary tax system, this is limited in quantity and therefore has little detrimental effect on overall health.”
“Downshifting to lower priced brands is an absolute economic right of consumers,” he said.
Neri added that pro-health advocates might also be missing the point that a unitary tax system likewise encourages consumers of cheaper brands to move to premium ones since the resulting marginal difference in price will be negligible, especially when sold by per piece.
House Bill No. 4144, authored by Rep. Eugene Michael de Vera of ABS Partylist, proposes a two-tier tax system, with non-premium brands levied at P32 per pack and premium brands at P36 per pack, plus an annual increase of 5 percent on these rates.
Neri said ensuring the fairness of a tax system was a paramount social goal, stressing that the administrative ease of collection should not be an excuse for enacting a regressive tax system which will result by imposing a unitary specific tax.
“The claim of using tobacco taxes to benefit the health of the poor is a tenuous argument. The poor will immediately feel the impact of the high tobacco tax draining his pocket while the benefit of government spending on his health is a highly uncertain future event,” Neri said.
“If the tobacco tax revenue is spent in general health services and not targeted directly, the poor smoker may end up subsidizing for the health care of non-smokers, making the situation even worse for the poor smoker,” he said.