Sinning Against the ‘Sin’ Tax Bill

JEERS to Malaya Business Insight for its aggressively biased reporting of the deliberations on the “sin” tax bill spanning a year from March 2012 until 2013, after the passage of the bill into law last December 2012.

From March 2012 to March 2013, Malaya Business Insight (MBI) published at least 160 news reports and opinion pieces on the “sin” tax bill, almost a third of which (51) appeared in the last quarter of 2012, when the debates on the issue were at its height. More than a hundred of the articles were biased against the passage of the bill, specifically against the proposal for higher taxes on cigarettes. The reports rarely gave comprehensive coverage of those advocating for reforms on the “sin” tax.

‘Sin’ tax debate

The senate and house versions of the “sin” tax bill had been consolidated as Republic Act 10351 (Sin Tax Reform Law of 2012) and then signed into law by President Aquino last Dec. 20, 2012. It became effective on Jan. 1, 2013. (http://www.gmanetwork.com/news/story/287166/economy/finance/pnoy-signs-sin-tax-bill-into-law-to-take-effect-jan-1-2013)

The “sin” tax was primarily put into the legislative  agenda after the World Trade Organization (WTO) gave the Philippines until March 2013 to amend the country’s excise tax law, which the US and the European Union (EU) claimed  unfairly favored local spirits and liquor. (http://www.interaksyon.com/business/50955/us-pleased-with-sin-tax-reform-ph-distilled-spirits-may-now-be-wto-compliant)

However, the focus of the debates on the “sin” tax shifted to the cigarette industry. Higher taxes were said to threaten local tobacco farmers and a cigarette manufacturer’s monopoly, and raised concerns over smuggling. On the other hand, “sin” tax advocates claimed that a level playing field and the positive effect higher-taxed cigarettes would have on public health outweighed opposition to it. (http://www.cmfr-phil.org/2012/12/21/covering-the-sin-tax-bill-mostly-focused-on-policy-issues/) MBI failed to present a fair and balanced coverage of this debate.

‘Cig’ maker complains

On Mar. 22, 2013,  British American Tobacco (BAT), a cigarette manufacturing company, wrote to CMFR  claiming that MBI had been unfair to BAT, alleging that the paper had “never” asked BAT to respond while the newspaper “baselessly accused” BAT of encouraging smuggling, of conspiring with finance secretary Purisima, and of lying about promised investments.

BAT had been pushing for the “sin” tax bill because the previous “sin” tax law imposed a higher tax on cigarette brands introduced after 1996 than on brands introduced earlier. BAT’s cigarettes are imported but it claims that it buys tobacco from local farmers. On March 2012, it was reported that BAT was preparing to invest P200-million in the Philippines if “sin” tax reforms pushed through. (http://www.abs-cbnnews.com/business/03/12/12/british-american-tobacco-mulls-200m-investment-ph)

BAT called attention to more than a year of news reports and opinion articles by MBI’s publisher Amado Macasaet. From Mar. 1, 2012 to Mar. 21, 2013, BAT said it found 81 articles that the company felt were “disparaging”.

“We believe … that Mr. Macasaet’s articles have crossed the bounds of professional journalism. Indeed, the sheer volume of the articles alone, as well as the frequency with which he makes unprovoked attacks on BAT, already speaks for itself and betrays a vendetta against or, at least, some inexplicable obsession about BAT,” James Lafferty, BAT general manager, said in his letter to CMFR as he categorically denied a number of Macasaet’s accusations.

In an interview with PJRR last May 2013, Robert Eugenio, head of BAT’s corporate and regulatory affairs, said the company was not considering taking legal action against Macasaet although MBI’s coverage had become a distressing annoyance.