Philippines: Protests reject new 'sin tax'

December 8, 2012

The People’s Coalition Against Regressive Taxation held a 4000-strong blockade of the upmarket Manila Shangri-La Hotel from December 5 to 6. The Bicameral Conference Committee, representing the upper and lower houses of the Philippines parliament, were inside debated the Sin Tax Bill, which will double the prices of cigarettes and alcohol.

Workers and farmers were represented in the blockade, whose ranks were drawn predominantly from the urban poor.

Supporters of the new tax, which includes health professional groups as well as purportedly progressive “civil society” organisations, claim reducing the affordability of tobacco and alcohol will improve the health of the poor.

This ignores the realities of the Philippines’ impoverished masses, who typically subsist on one rice-based meal a day, suffer the stress of irregular employment and when they do find work it is usually with long hours and unhealthy and unsafe conditions. All these factors contribute to poor health as well as relatively high rates of smoking.

This poverty is made worse by an extremely regressive taxation system with corporations paying little or no tax and the government relying instead on a 12% sales tax.

The government claims that revenue from the “sin tax” will go to its “universal health program”, a claim that would be more convincing if such a program existed.

In fact, the Philippines’ mostly private health system is the most expensive and inaccessible in south-east Asia. The government is in the process of privatising public hospitals, including the Philippine General Hospital and the National Orthopedic Hospital.

The left-wing Party of the Labouring Masses (PLM) joined the protests on the basis that the Sin Tax is a regressive tax on consumption that further shifts the tax burden to the poor.

They questioned the reluctance of the government and “civil society” organisations to take on the corporations profiting from tobacco and alcohol sales, citing their failure to call for tobacco and beer baron Lucio Tan to pay his 1.2 trillion peso ($29.3 billion) tax bill.

They also criticised measures in the bill that will equalise prices between local and imported products. This will destroy the livelihood of Filipino farmers and weaken domestic industry, increasing poverty while benefiting multinational tobacco and alcohol companies.

Proposed amendments would mandate that 15% of tobacco be sourced locally, but, in a full page advertisement in the December 5 Philippine Daily Inquirer, the bill’s “civil society” supporters opposed these amendments, saying they violate World Trade Organisation rules, specifically Article 3.5 of the General Agreement on Tariffs and Trade.

The PLM condemned this betrayal of the traditional stance of Filipino civil society, which opposed the neoliberal diktats of international bodies such as the WTO aimed at “opening” the Philippines as a market for multinational corporations at the expense of Filipino industry and farmers.

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