Bangsamoro as Kosovo

Lowdown

By Jojo Robles

Who doesn’t want peace in Muslim Mindanao, now rechristened “Bangsamoro” by virtue of a framework agreement signed yesterday between the Philippine government and the Moro Islamic Liberation Front, with the backing of Malaysia? But will peace truly follow now that President Noynoy Aquino has imposed his own version of Muslim autonomy in the region, or will the agreement eventually lead to the creation of a separate state in Mindanao, like strife-torn Kosovo was in the former Yugoslavia?

The Kosovo template of ethnic tension leading to autonomy and, eventually, bloody independence backed by foreign powers is not idle speculation. The long-standing Balkan trouble spot of Kosovo, after all, shares a war-ravaged history, ethnic differentiation and international intervention with Muslim Mindanao.

In Kosovo, the trouble began after Yugoslavia decided to give its troubled province autonomy. When the pro-independence Kosovo Liberation Army started attacking government forces, the Yugoslav government fought back, eventually starting the 1998-1999 Kosovo War, which was settled by the intervention of the North Atlantic Treaty Organization and United Nations peacekeeping forces.

An exodus of Kosovo residents fleeing the war—reminiscent of the Muslim Filipino exodus to Malaysia —plagued Serbia and Montenegro. Eventually, Kosovo declared independence, backed by the guns of both NATO and the UN.

Kosovo remains an international poster child of strife, despite the best intentions and the firepower of the people who would want to see it become a separate state. But perhaps eternal turmoil is what the big powers want in Kosovo—and in the new Bangsamoro.

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If the Aquino administration and its allies in the health sector truly want to see the health of Filipinos improve, why don’t they ban cigarettes and alcohol altogether? But they can’t do that because, just as President Noynoy Aquino is, by his own admission, addicted to nicotine, his government is a slave of the taxes that the so-called “sin products” bring in.

This “policy incoherence,” as the much-maligned Senator Ralph Recto calls it, lies at the heart of the controversy to raise taxes on alcohol and tobacco. And just as the government cannot live without the expanded value-added tax that Recto once backed, it seems it cannot let go of its addiction to sin taxes – despite its supposed altruistic aim of improving every Filipino’s health.

Nowhere is this government’s hypocrisy clearer than in its desire to price cigarettes and liquor beyond the reach of the ordinary Filipino consumer, to discourage the population from smoking and drinking. And yet it wants to generate more revenues from the taxes imposed on the sales of tobacco and alcohol products to fund healthcare programs.

“If the social injury these products cause is greater than the taxes they contribute, then government should stop asking money from those who pack cigarettes and bottle alcohol and should instead tell them to pack up and go,” said Recto in his sponsorship speech on the proposal to increase excise taxes on sin products. Recto says he actually agrees with the anti-tobacco groups that are now bashing him for coming up an excise tax measure supposedly far weaker than what they had demanded.

But if the government truly wants to ban smoking and drinking, it has to let go of its addiction to the taxes collected from alcohol and tobacco companies. Only, if cigarettes and alcohol were suddenly made illegal, Recto explained, the government would go into “fiscal shock” like a nicotine or alcohol addict gone cold turkey.

The Department of Finance claims it needs the additional P60 billion it expects from imposing excise tax hikes of up to 1,000 percent on cigarettes and distilled spirits to fund health care. But it does not bother to explain how it came up with this fantastic figure, or whether this revenue goal is actually attainable.

Recto insists the P60-billion target is way below the different estimates made by government tax experts themselves. In one revenue scenario, the tax yield would actually be P23 billion, or only 38 percent of the DOF goal.

The senator, who chairs the ways and means committee, conducted several hearings on the proposed excise tax hike. It heard the positions presented by experts, stakeholders and government officials and other affected sectors on the proposal.

But anti-tobacco advocates want Recto to listen only to them and to ignore all the other findings of the committee. They are now angry and are branding Recto’s committee report as a sellout to Big Tobacco after the senator came out with a proposal that balanced the interests of all the sectors involved, including the government.

As correctly pointed out by Recto, haphazardly and abruptly raising tobacco taxes like anti-tobacco groups want is counterproductive. They want a tax policy that would discourage smoking and alcohol drinking, which requires a “careful calibration of rates,” and not a radical measure that would lead to diminishing tax returns, Recto points out.

And this is what the government and its allies have either conveniently forgotten or ignored totally in their futile, incoherent quest to twist and mangle “sin” taxation into becoming both a health and a revenue measure. As any smoker or alcoholic will tell you, you can’t have it both ways—indulging in sin and not indulging at all.