C hapter 3
Monitoring Implementation of the Sin Tax Law
Introduction With effective implementation, the Sin Tax Law (STL) should deliver significant health, revenue, and good governance benefits. The health benefits will be derived partly from reduced domestic consumption as smokers adjust to the higher prices associated with the new excise tax rates.1 The health benefits will also depend on the size, allocation, and efficiency of spending of the incremental STL revenues, about 85 percent of which are earmarked for universal health care and other health programs. Government revenues will be determined by the prevailing annual unit tax rates per product classification, legal production and sales volumes, and effective administration and revenue protection measures. Farmers in tobacco-growing regions should benefit from earmarked funding for projects to diversify their crops and incomes, translating into improved livelihoods. Finally, effective implementation of the STL should be a win for good governance, especially if accompanied by open and transparent evidence-based monitoring. To help ensure the STL’s effective implementation, as well as to track its accomplishments and any shortcomings, this chapter offers a monitoring framework for the law’s implementation, an assessment of implementation progress to date, and recommendations to help ensure its objectives are achieved. The monitoring framework has 14 indicators—seven on the taxation side and seven on the expenditure side—and can be used by government, civil society, and the private sector (table 3.1).2 One challenge is ensuring the availability of baseline and follow-up data. Where gaps exist, alternative information sources will be needed. Another challenge is to ensure the consistency with which indicators and related data are measured over time. Perhaps the biggest challenge is the sheer number of agencies and data sources involved in updating the indicators in the framework, and thus the coordination needed for effective monitoring.
Sin Tax Reform in the Philippines • http://dx.doi.org/10.1596/978-1-4648-0806-7
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