Mighty Corp., the country’s oldest tobacco company, vowed to support any decision that he government will make on the issue of cigarette taxes.
“The two-tier tax system will benefit the government in terms of revenues. Not only will it benefit local farmers, it will also continue to help the economy,” retired Lt. Gen. Edilberto P. Adan, Mighty Corp. president, said.
“Mighty Corp. has always been fully supportive of the government’s efforts to raise revenues from tobacco products, promote health, and support local farmers,” he added.
He described House Bill 4144 as “the most advantageous measure” because it is expected to optimize revenue generation, address the concerns of health advocates, and provide local tobacco farmers with a steady stream of livelihood opportunities.
HB 4144 proposes the adoption of a two-tier system in place of a unitary tax rate which is supposed to be implemented in January next year. The House Ways and Means Committee approved the measure last week.
Under Republic Act 10351 or the Sin Tax Reform law, the excise tax rates for cigarettes — currently at P25 per pack for low-priced brands and P29 per pack for premium brands — shall be replaced by a unitary tax rate of P30 per pack.
HB 4144 aims to amend Section 145(c) of the National Internal Revenue Code which mandates the imposition of the unitary tax rate.
Adan said the success of RA 10351, which has been hailed by institutions like the World Bank as a model tax measure, and praised by health advocates, can be traced to the introduction of a two-tier system for excise taxes.
“We believe that HB 4144 will be a boost to the Duterte administration’s tax reform program,” he said.
Some members of Congress have argued that the unitary tax system is regressive because it is applied indiscriminately to all consumers irrespective of economic class.