Friday, July 10, 2009

Sin Taxes in the Philippines

Revenue increase of P19 billion in the first year of implementation alone puts the Department of Finance (DOF) into lobbying for both houses of Congress to pass a law to correct the weaknesses of the excise tax on alcohol and tobacco products law. 

Otherwise known as Republic Act 9334, the excise tax law needs to be restructured to keep tax rates at par with Asian neighbors, sources at the finance department said. 

The Philippines has the lowest excise tax rates among Asian countries and still loses more revenues with its implementation of lower corporate income tax, high personal exemptions and tax incentives, DOF said 

DOF also points out that the law is prone to downshifting or misreporting of consumption from high-priced and high-taxed brands to low-priced and low-taxed brands resulting in lower revenues.  

"The current excise tax structure also needs to classify brands which create discretion for the taxing authority.  The law is likewise eroded by inflation due to lack of automatic tax rate adjustment, the government agency said.    

Over these, the agency is proposing for the adoption of a unitary tax rate for each category of alcohol and tobacco products, which will also lapse in time.

Under the scheme, a unitary rate will be indexed using a relevant price index for tobacco and alcohol. 

With the revenues from the excise tax, DOF proposes to allocate a portion of the excise tax revenues to a trust fund for the transitional guaranteed income of farmers who are shifting to other crops. 

DOF says, the country needs to raise revenues now to strengthen its fiscal position amidst continuing pressure from the global recession.  

With the threat of economic recession in the country, the DOF explains that the government has to have more revenues to pump-prime the economy. (PIA)

Insurgents and Rebels in Bohol Island, Philippines

Insurgents in Bohol have become insignificant that authorities have downgraded the "single fighting front" into a section level, a high-ranking military officer said.

Considered then as a formidable force of three guerilla fronts gripping Boholanos in reign of fear, the local members of the outlawed Communist Party of the Philippines New People's Army (CPP-NPA) were forced to regroup outside the province following effective convergent anti-insurgency efforts by the civilian and military authorities here.

The remaining rebels who could not leave Bohol disbanded, while 13 insurgents are now being processed for the government's integration back to the mainstream, army's Major Eduardo Malig-on said.

 "At least in the whole area under the military jurisdiction of the 802nd Brigade led by Col. Alan Luga, I can say that they [rebels] have been left ineffective due to our joint efforts with local governments, the private sector and the communities," he said.

"Rebels have become insignificant they could not successfully put up a tactical offensive", he adds.

At the weekly Kapihan sa PIA, the army officer recounted how insurgents' attacks on vital installations: cell site towers in Carmen and Candijay towns ended up.

Quick action and coordination among private security guards and the immediate community helped foil the attempt, Maj. Malig-on shared.

Himself the 802nd Brigade's Civil Military Operations (CMO) Officer, Maj. Malig-on said the military now, armed with their best CMO tool; their discipline takes over the vacuum.

The government forces then cements communities and empowers people to defend from themselves and withstand the possible return of the rebels, while introducing more livelihood opportunities to supplement family income.

Romeo Teruel, a peace advocate formerly handling Capitol's poverty reduction program believed ousting communities from poverty deters rebels from instigating the community to hurl anti-government sentiments, this he continuously stresses in his talks with the people here.

Now left filling in the vacuum left by the insurgents, the army's special action forces metamorphosed from fighting into machines bringing in community development through infrastructure building and livelihood training assistance, the civil military operations chief added.

Bohol has become a national model for it's anti-insurgency efforts: one that showed two prongs: the government's strong and soft hands.

In fact, with Bohol model being replicated all over the country, no less than 67th Infantry Batallion Commander Maj. Gen Reynaldo Mapagu who said the CPP-NPA is losing in every front, losing their mass support in the barangays and struggling with issues from within. (PIA)