Health advocates join calls for probe into alleged tobacco firm’s tax malpractices

By , on December 28, 2014

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MANILA — Anti-smoking groups have joined the calls for a congressional probe into cigarette maker Mighty Corporation over alleged tax malpractices.

The organizations composed of The Framework Convention on Tobacco Control Alliance Philippines (FCAP), New Vois Association of the Philippines (NVAP) and Philippine College of Physicians (PCP) said there is a need for an investigation on how tobacco companies, particularly Mighty Corp., are adhering to Republic Act 10351 or the Sin Tax Law.

“There should be a congressional probe into sin tax malpractices and illicit trade (not just of Mighty) but of all tobacco companies,” said FCAP Executive Director Dr. Maricar Limpin in statement .

She said it is a dangerous precedent to allow violations of existing (tax) laws as it invalidates the purpose of the measure, noting that failure to comply with the sin tax law means that cigarettes would remain affordable to children and the poor.

“They get to undermine the law and thus prevent us from achieving the two main objectives of sin tax: health and revenues,” Limpin said.

On the other hand, NVAP President Emer Rojas said that an assessment of the sin tax law is necessary.

“As it stated in the law, that the sin tax law must be assessed again before 2017 or the final year of implementation,” he said

PCP President Dr. Tony Leachon also welcomed the sin tax review, especially to assess its health and revenue impact.

“But a review has just been done and it will be redundant to have another review this soon,” he said.

The Bulacan-based cigarette firm has been criticized for selling its products at economically unsustainable prices – even below the cost of production, excise tax and VAT.

RA 10351 is one of the major health and revenue measures passed by the Aquino administration with the aim of increasing cigarette prices and alcoholic drinks, thereby making them unaffordable for the youth and the poor.

Under the law, 85 percent of sin tax revenues is earmarked for the enrollment of the poorest of the poor to the Philippine Health Insurance Corporation (PhilHealth).

Earlier, the Department of Health and lawmakers led by House Speaker Feliciano Belmonte, Jr. and Senators Antonio Trillanes IV and Juan Edgardo Angara called for a congressional inquiry against Mighty Corp.