Excise Tax Section to be ammended: SEC. 145. Cigars and Cigarettes. (A) Cigars.

- There shall be levied, assessed and collected on cigars a tax of One peso (P1.00) per cigar. (B) Cigarettes Packed by Hand. - There shall be levied, assessed and collected on cigarettes packed by hand a tax of Forty centavos (P0.40) per pack. (C) Cigarettes Packed by Machine. - There shall be levied, assessed and collected on cigarettes packed by machine a tax at the rates prescribed below: (1) If the net retail price (excluding the excise tax and the value-added tax) is above Ten pesos (P10.00) per pack, the tax shall be Twelve pesos (P12.00) per pack; (2) If the net retail price (excluding the excise tax and the value-added tax) exceeds Six pesos and fifty centavos (P6.50) but does not exceed Ten pesos (P10.00) per pack, the tax shall be Eight pesos (8.00) per pack; (3) If the net retail price (excluding the excise tax and the value-added tax) is Five pesos (P5.00) but does not exceed Six pesos and fifty centavos (P6.50) per pack, the tax shall be Five pesos (P5.00) per pack; (4) If the net retail price (excluding the excise tax and the value-added tax is below Five pesos (P5.00) per pack, the tax shall be One peso (P1.00) per pack; AMMENDMENT: SEC. 145. Cigars and Cigarettes. (A) Cigars. - There shall be levied, assessed and collected on cigars a tax of One peso (P2.00) per cigar. (B) Cigarettes Packed by Hand. - There shall be levied, assessed and collected on cigarettes packed by hand a tax of Forty centavos (P0.80) per pack. (C) Cigarettes Packed by Machine. - There shall be levied, assessed and collected on cigarettes packed by machine a tax at the rates prescribed below: (1) If the net retail price (excluding the excise tax and the value-added tax) is above Ten pesos (P10.00) per pack, the tax shall be Fifteen pesos (P15.00) per pack;

(2) If the net retail price (excluding the excise tax and the value-added tax) exceeds Six pesos and fifty centavos (P6.50) but does not exceed Ten pesos (P10.00) per pack, the tax shall be Ten pesos (P10.00) per pack; (3) If the net retail price (excluding the excise tax and the value-added tax) is Five pesos (P5.00) but does not exceed Six pesos and fifty centavos (P6.50) per pack, the tax shall be Eight pesos and seventy-five centavos (P8.75) per pack; (4) If the net retail price (excluding the excise tax and the value-added tax is below Five pesos (P5.00) per pack, the tax shall be One peso and twenty-five centavos (P1.25) per pack;

REASON FOR AMMENDING: Presented in this section 145 of Chapter IV : Excise Tax on Tobacco Products of the National Internal Revenue Code of the Philippines (Tax Reform Act of 1997 also known as Republic Act No. 8424) are the taxes levied on cigars and cigarettes. Im ammending this section thereby increasing the taxes imposed on this type of products. The basis for these ammendments are coming from the increasing number of people who are getting diseases related to smoking. In 1964, the Surgeon Generals report announced medical research showing that smoking was a definite cause of cancers of the lung and larynx (voice box) in men and chronic bronchitis in both men and women. Later reports concluded that smoking causes a number of other diseases such as cancers of the bladder, esophagus, mouth and throat; cardiovascular diseases; and reproductive effects. Todays new report, The Health Consequences of Smoking: A Report of the Surgeon General, expands the list of illness and conditions linked to smoking. The new illnesses and diseases are cataracts, pneumonia, acute myeloid leukemia, abdominal aortic aneurysm, stomach cancer, pancreatic cancer, cervical cancer, kidney cancer and periodontitis.
(List of Diseases Caused by Smoking Getting Longer - http://www.encognitive.com/node/1680 )

So inorder to help the humanity to avoid getting these diseases, taxes imposed on cigars should be increased by 100% giving the new tax per cigar of (P2.00) and for the cigarettes packed by hand, an increased of 100% as well shall be imposed thus making it (P0.80) per pack. In terms of cigarettes packed by machine, the levied taxes are to be increased by 25% thus giving the new tax rates: Net Retail Price(Excluding VAT & Excise Tax) Above P10.00 Above P6.50 but less than P10.00 Tax per pack P15.00 P10.00

P5.00 up but less than P6.50 Below P5.00

P8.75 P1.25

The imposition of a higher tax rate for cigars and cigarettes will lessen the risk of getting diseases related to the use of cigars and cigarettes but to the part of the countrys economy, it will affect the taxes to be collected. Eventhough the taxes are increased it doesnt mean that the income of the country in terms of the taxes collected from cigars and cigarettes will also increase because the sales will be affected. The consumption of the people who used to use these products will decline due to high prices. This is beneficial to the health but may also pose a threat for the countrys income generation from the taxes under its jurisdicton.

Section to be ammended: SEC. 144. Tobacco Products. - There shall be collected a tax of seventy-five centavos (P0.75) on each kilogram of the following products of tobacco: (a) Tobacco twisted by hand or reduced into a condition to be consumed in any manner other than the ordinary mode of drying and curing; (b) Tobacco prepared or partially prepared with or without the use of any machine orinstruments or without being pressed or sweetened; and (c) Fine-cut shorts and refuse, scraps, clippings, cuttings, stems and sweepings of tobacco. Fine-cut shorts and refuse, scraps, clippings, cuttings, stems and sweepings of tobacco resulting from the handling or stripping of whole leaf tobacco may be transferred, disposed of, or otherwise sold, without prepayment of the excise tax herein provided for under such conditions as may be prescribed in the rules and regulations promulgated by the Secretary of Finance, upon recommendation of the Commissioner, if the same are to be exported or to be used in the manufacture of other tobacco products on which the excise tax will eventually be paid on the finished product. On tobacco specially prepared for chewing so as to be unsuitable for use in any other manner, on each kilogram, Sixty centavos (P0.60). AMMENDMENT : SEC. 144. Tobacco Products. - There shall be collected a tax of seventy-five centavos (P1.50) on each kilogram of the following products of tobacco: (a) Tobacco twisted by hand or reduced into a condition to be consumed in any manner other than the ordinary mode of drying and curing; (b) Tobacco prepared or partially prepared with or without the use of any machine or instruments or without being pressed or sweetened; and

(c) Fine-cut shorts and refuse, scraps, clippings, cuttings, stems and sweepings of tobacco. .. On tobacco specially prepared for chewing so as to be unsuitable for use in any other manner, on each kilogram, Sixty centavos (P1.20).

REASON OF AMMENDING: The Section 144 of the Chapter IV : Excise Tax on Tobacco Products of the National Internal Revenue Code of the Philippines (Tax Reform Act of 1997 also known as Republic Act No. 8424), talks about the tax to be levied on the tobacco products. As stated in the section, the tax shall be seventy-five centavos (P0.75) on each kilogram of each of the products of tobacco which are twisted by hands or reduced into condition to be consumed in any manner other than drying and curing , fine-cut shorts and refuse, scraps, clippings, cuttings, stems and sweepings of tobacco, and prepared or partially prepared with or without the use of any machine or instruments or without being sweetened or pressed. As a concerned citizen, I want that the tax imposed in these tobacco products falling under the 3 condition stated be increased by 100% giving the new tax per kilogram of (P1.50) and of P1.20 per kg for tobacco specially prepared for chewing. This increase will be applicable to the so stated products of tobacco under section 144. The basis for these ammendments are the increasing dangers of tobacco as so listed in the site. The list of dangers brought by tobacco are premature wrinkling of skin, fires, cancer, heart disease, high blood pressure, and stroke, chronic hoarseness and laryngeal polyps, poor sex life, smoking and pregnancy, emphysema, more training injuries, less stamina than non-smokers, gum, dental and mouth disease, ear infections and URI's and smoker's rhinitis.
(Source : Dangers of Tobacco -http://www.tobacco-facts.info/dangers_of_tobacco.htm)

Section to be ammended: SEC. 132. Mode of Computing Contents of Cask or Package. - Every fractional part of a proof liter equal to or greater than a half liter in a cask or package containing more than one liter shall be taxed as a liter, and any smaller fractional part shall be exempt; but any package of spirits, the total content of which are less than a proof liter, shall be taxed as one liter. Ammendment : SEC. 132. Mode of Computing Contents of Cask or Package. - Every fractional part of a proof liter equal to or greater than one fourth of a liter in a cask or package containing more than one liter shall be taxed as a liter, and any smaller fractional part below one fourth of a liter in a cask or package shall be exempt; but any package of spirits, the total content of which are less than a proof liter, shall be taxed as one liter. Reason for Ammending:

Section 132 talks about the mode of computing contents of cask or package for proofs and spirits. In imposing tax on the contents of these casks or packages, the government should ensure that there is proper regulation and control so as to minimize the abuse use of this. Proper imposition of tax even to small fractional part of these cask or packages of distilled spirits and alcohol will help minimize the harmful effects of the abused use of these liquors. The negative side effects of excessive and abusive use of these articles will lead to loss of brain cells, liver failure, stomach ulcers, high blood pressure, and certain types of cancer, epilepsy, nerve damage and heart failure. Inorder to help the people to be health concerned, the government must impose a stricter and higher tax for every liter of cask or packages. (Source: The negative Effects of Drinking too Much Alcohol http://www.articlesbase.com)

Section to be ammended: SEC. 139. Removal of Damaged Liquors Free of Tax. - When any fermented liquor has become sour or otherwise damaged so as to be unfit for use as such, brewers may sell and after securing a special permit from the Commissioner, under such conditions as may be prescribed in the rules and regulations prescribed by the Secretary of Finance, remove the same without the payment of tax thereon in cask or other packages, distinct from those ordinarily used for fermented liquors, each containing not less than one hundred seventy-five (175) liters with a note of their contents permanently affixed thereon. Ammendment: SEC. 139. Tax on Removal of Damaged Liquors - When any fermented liquor has become sour or otherwise damaged so as to be unfit for use as such, brewers may sell and after securing a special permit from the Commissioner, under such conditions as may be prescribed in the rules and regulations prescribed by the Secretary of Finance, remove the same by paying tax equal to one fourth of the cost cask or other packages of liquors damaged, distinct from those ordinarily used for fermented liquors, each containing not less than one hundred seventy-five (175) liters with a note of their contents permanently affixed thereon.

Reason for Ammending: Section 139 talks about the removal of damaged liquors free from tax. As stated in the provision of this excise tax, that imported articles like the liquors are stored in the custody of the bureau of customs, by the moment the imported liquors arrived in the hands of th customs, it incur costs. One of the cost incurred is the storage cost. As for

the accounting of the storage cost, if no tax will be imposed on the removal of damaged liquors then the government will have a loss in terms of its storage cost being utilized by the damaged liquors. So to compensate this loss the government must impose a tax on the removal of damaged liquors equal to one fourth of the cost of cask or other packages of the liquors damaged. Section to be ammended: SEC. 146. Inspection Fee. - For inspection made in accordance with this Chapter, there shall be collected a fee of Fifty centavos (P0.50) for each thousand cigars or fraction thereof; Ten centavos (P0.10) for each thousand cigarettes of fraction thereof; Two centavos (P0.02) for each kilogram of leaf tobacco or fraction thereof; and Three centavos (P0.03) for each kilogram or fraction thereof, of scrap and other manufactured tobacco. The inspection fee on leaf tobacco, scrap, cigars, cigarettes and other tobacco products as defined in Section 147 of this Code shall be paid by the wholesaler, manufacturer, producer, owner or operator of redrying plant, as the case may be, immediately before removal there of from the establishment of the wholesaler, manufacturer, owner or operator of the redrying plant. In case of imported leaf tobacco and products thereof, the inspection fee shall be paid by the importer before removal from customs' custody. Fifty percent (50%) of the tobacco inspection fee shall accrue to the Tobacco Inspection Fund created by Section 12 of Act No. 2613, as amended by Act No. 3179, and fifty percent (50%) shall accrue to the Cultural Center of the Philippines.

Ammendments: SEC. 146. Inspection Fee. - For inspection made in accordance with this Chapter, there shall be collected a fee of one peso (P1.00) for each thousand cigars or fraction thereof; Twenty centavos (P0.20) for each thousand cigarettes of fraction thereof; Fourcentavos (P0.04) for each kilogram of leaf tobacco or fraction thereof; and Six centavos (P0.06) for each kilogram or fraction thereof, of scrap and other manufactured tobacco. Reason for Ammending: Section 146 is about inspection fee paid by the wholesaler, manufacturer, producer, owner or operator of redrying plant, as the case may be, immediately before removal there of from the establishment of the wholesaler, manufacturer, owner or operator of the redrying plant. In case of imported leaf tobacco and products thereof, the inspection fee shall be paid by the importer before removal from customs' custody.

The government must impose a higher rate of tax for the inspection fee so as to facilitate a moderate production or importation of cigars, cigarettes and tobacco products that are harmful to the health of the people especially for excessive and abusive used. The imposition of higher tax rate per unit of measurement of these cigars, cigarettes and tobacco products will provide the countrys revenue from its tax to be higher provided that the consumers will be constant but if not, this will pose a threat to the part of the company.