Japan Tobacco open to ‘sin’ tax changes
Tobacco maker Japan Tobacco International Philippines, Inc. (JTIP) appears to be open to changes in the "sin" tax law but stressed that any new legislation changing the excise tax rates should be done after 2011.
JTIP general manager Roger Lamb said the current law, RA 9334, must be allowed to expire and roll out its last increase due on Jan. 1, 2011.
Under the law, "sin" tax rates for cigarettes and alcohol products increase every two years starting in 2005 with the last increment taking place next year.
Lamb said some proposed measures seeking to overhaul the current sin tax law provide for an increase in tax rates in 2011, which if passed would result to a double whammy for the local tobacco industry.
"We do note that some bills suggest proposals for an increase in excise tax in 2011 and it must be recognized that an excise tax increase is already in place for January 1, 2011 as provided for in the current law," Lamb said in an e-mailed statement.
"Excise tax changes should only be considered post-2011," he added.
The position of JTI, which markets global brands Winston, Mild Seven and Camel in the country, runs contrary to the stand taken by market leader PMFTC.
PMFTC is seeking an extension of the current multi-tier sin tax regime by another five to six years.
"Why discuss the restructuring (of the sin tax rates) when the law is proving to be successful," PMFTC president Chris Nelson said in an earlier interview.
He said proof of this success is the almost 80 percent upswing in the sin tax collection during the past month with revenues close to reaching P30 billion by year-end.
The Philip Morris chief executive said the tobacco maker supports "an extension of the existing system" that would cover another 5 years to 6 years.
Nelson said the extension of the sin tax law would likewise validate the campaign promise of President Aquino of imposing no new taxes during his six-year presidency.
PMFTC, a merger between Philip Morris and Fortune Tobacco Corp., controls over 90 percent of the local cigarette market.
JTI Philippines, which has a share of less than 10 percent of the market, is a member of the Japan Tobacco Group of Companies. Other international brands carried by JTI include Benson & Hedges, Silk Cut, Sobranie of London, Glamour and LD.
RA 9334 is expiring in 2011, prompting legislators to scramble for their own versions.
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