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For cash-starved govt, sin taxes are growing temptation


Should there be a pressing need to collect new taxes in the near term, the imposition of higher taxes on cigarettes would be a priority, President Benigno Aquino III said on Monday. "From a societal concern, I say yes to the idea of an increase in sin taxes. There are trade-offs. As you know, these sin products have a health burden on the people, and this health burden has a peso value," said Aquino, a known smoker. He was responding to reporters who asked him for a comment on Health Secretary Enrique Ona's support for imposing higher taxes on cigarettes. But Aquino said there is a need to study "very, very well" the proposal to impose higher sin taxes, adding that the decision ultimately rests on Congress, as the branch of government that passes all measures on taxation and appropriations. "At this point in time, we have not been advised that there is a necessity to [impose new taxes]," the president said, pointing out that the executive branch adjusted the proposed 2011 budget to focus on managing inflation and the. As one of his campaign pledges Aquino vowed that despite intensified efforts to plug loopholes in tax collection he would only impose new taxes as a last resort if government fails to meet its revenue goals. Previous attempts to impose taxes alcohol and cigarettes failed in Congress due to strong opposition by tobacco firms and lawmakers representing tobacco-producing provinces despite the Finance Department's push for higher sin taxes. —JE/VS, GMANews.TV

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