Use govt records in fight vs. tobacco monopolies – solon

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Deputy Speaker Sergio Apostol (Leyte’s 2nd District) has urged his colleagues in the House of Representatives to rely only on official government records in going after foreign monopolies in the multibillion-peso tobacco industry.

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In a statement, Apostol bewailed what he felt were disturbing developments in the price war pitting companies in the tobacco industry against one another.

“This ugly war is an example of why the immediate approval of the antitrust bill is to be considered with utmost urgency,” said the solon who called for the breaking up of business monopolies in the country.

Apostol cited a case study on Tobacco Control in the Philippines by Karima Ladhani and Michael Sinclair of the Harvard School of Public Health that analyzed why tobacco companies in the Philippines have maintained a high level of influence and command industry favorability from the government.

The study tagged Philip Morris Philippines Manufacturing, Inc., which has a 90-percent
tobacco market share, as being essentially a monopoly, and reported that it has been using its power to influence legislation and protect its interest through lobbying and propaganda manipulation.

According to Apostol, “as of today, this multinational company which in 2010 entered into a joint venture agreement with Fortune Tobacco Corporation, now known as Philip Morris Fortune Tobacco Company [PMFTC], suffered a considerable drop in its market share to approximately 80 percent since the implementation of the Sin Tax Law [Republic Act 10351].”

The solon recalled that, in 2012, PMFTC employees successfully protested the implementation of a single-tier taxation system. He even quoted PMFTC’s Labor Union vice president Rodel Rubias as saying in a GMA-7 interview that the system would have a “domino effect” that would endanger local producers.

Instead, local producers became stronger and the government has so far surpassed excise tax collection goals, based on the latest Bureau of Internal Revenue (BIR) records.

In the first quarter of 2014, the government’s excise tax collection from tobacco products exceeded by 4.5 percent or P11.34 billion its target of P10.85 billion.

Tax collections from cigarettes at end-April rose by approximately 28 percent from P9.92 billion in the same period in 2013.

The new tax schedule surprisingly resulted in a considerable decrease of PMFTC’s dominant market share, and that, according to Apostol, is what started the tobacco war.

“The only viable reason that I can think of is that PMFTC wants Congress to amend the acceleration of the unitary tax system that they themselves lobbied against by making competition as a convenient scapegoat, using information from polluted sources instead of relying on official government data, not only to deceive Congress but also its stakeholders and other investors,” Apostol said.

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