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Why can’t GMA impose higher sin taxes to reduce energy costs?
AS I WRECK THIS CHAIR By William M. Esposo
The Philippine Star 2008-07-17
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Consider this — as of five years ago, annual tobacco revenue was estimated at P21 billion while treating Filipinos with tobacco related diseases and lost productivity cost the government P42 billion.
Per a Swiss journalist who was based here for over 10 years and had extensively traveled the country — excessive alcohol intake is our bigger social problem, not illegal drugs. That is not hard to believe. Just look at the number of road accidents reported nightly on the TV news that are rooted to drunk drivers or motorcycle riders. Most cases of domestic violence can also be traced to abusers who acted under the influence of alcohol.
The Euromonitor notes that beer is the most consumed alcoholic drink in the Philippines, accounting for a 70% share of the 2005 alcoholic beverage market in terms of volume. The 2005 Per Capita Philippine Beer Consumption is 15 liters per year, according to The Euromonitor.
The proposal that oil and power generation and distribution taxes should be reduced and that higher sin taxes (such as taxes on tobacco and alcoholic beverages) should be imposed instead makes a lot of sense.
High oil and power generation and distribution taxes devastate businesses and add to the misery of those already living a hand-to-mouth existence. On the other hand, sin products should be discouraged and justifiably taxed heavily.
Luxury items should also be taxed heavily to reduce the tax on oil and electricity. We should triple the taxes on luxury vehicles like Mercedes Benzes, Jaguars, and Porches. Impose a higher tax on cars with engines that are more than 2,000 cc. Triple the taxes on jewelry and expensive watches, clothes, shoes, bags and other fashion accessories.
It suits the ego trippers who subscribe to these luxury goods to be associated with pricey items so let’s make their status symbols “more exclusive.” After all, the more expensive the status symbol, the more “enhancing” it is to the image sought to be projected.
We can also impose a much higher cost of building permits and realty tax for houses that exceed P20 million in construction and properties that are more than 400 square meters.
It serves Madame Gloria Macapagal Arroyo’s (GMA) political interest to reduce the number of these mansions and palaces that contrasts dramatically with the ever growing number of slums and lean-tos. These visible contrasts stoke the fires of revolution. And GMA has long been vulnerable to one happening during her term.
Even the proposal to impose an added tax on texting is justifiable for so long as the consumers are allowed their reasonable allocation of cheap text messages. Beyond that allocation, then it is justified to make them pay a tax. After all, a lot of senseless messages are circulated by text. Filipinos should be directed towards a more productive use of text and their time.
GMA could even benefit politically if she raises text tax because it will force those who circulate hate messages against her to think twice. Pay more if you hate GMA more.
So why doesn’t GMA implement these? How come she insists on making life unnecessarily more miserable for Filipinos who are affected by high prices of oil and power generation and distribution? Does she not see the negative socio-economic impact of high energy costs?
It is one thing for GMA to say that we cannot afford to reduce or remove the taxes imposed on oil and electricity generation and distribution. The government needs the revenues.
But it is unconscionable for GMA to still refuse to remove or reduce taxes on oil and power generation and distribution when there are very good alternative revenue sources ‑ such as increased taxes in sin products and luxury consumption. It is illogical why she would not opt to impose higher taxes on sin products and luxury consumption to reduce those oil and electricity taxes that make life miserable for Filipinos and inflict negative effects on businesses.
The only reason that comes to mind why GMA would not want to resort to the better tax alternative is the politics of sin products. She finds it hard to risk losing the political support of Danding Cojuangco and the ever-reliable financial support of Lucio Tan.
Danding Cojuangco is on top of San Miguel Beer and Ginebra San Miguel while Lucio Tan rules over Fortune Tobacco and Tanduay Rhum. Danding is also the big boss of regime coalition partner Nationalist People’s Coalition (NPC). Lucio Tan, on the other hand, is known for his generosity. He assists whatever “worthy” cause needs funding.
To those who know GMA, the choice is quite understandable. For her to choose the better tax alternative is what will prove shocking.
How many times has it been demonstrated during GMA’s political career that she places a higher priority on the gratification of the elite, the few who help keep her in power ‑ over the welfare of the people she swore to serve and protect?
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