Local Studies

The effectiveness of the law is measured by how it fulfills the rationale why it is
ratified by the legislative body that is authorized to pass it and the attainment of its
success would be contingent on various factors. According to a study on the
implementation of the Local taxation power of a barangay granted by the Local
Government Code of 1991, Awareness plays a vital role on the effectiveness of a
governmental policy. The study was conducted in three barangays in Rizal wherein
the barangay which has its officials making an effort to let their people be aware of
the implementation of the said policy (ie. Posting it in the various location in
Brangay for everyone to see and brigades conducted by the Barangay officials) has
attained drastic increase in their revenue collection. They proved that if the people
were consulted and informed every time the barangay legislative body consider tax
measure, the people would be more cooperative and the effectiveness of the policy
would likewise be attain.
In another study conducted regarding the level of awareness of the residents in the
Local Affairs of Barangay IV, Lipa city. Awareness again is a key factor towards
the participation of the residences in the aforementioned barangay which
transcends to a better implementation and effectiveness of the policies of the
barangay.
Another study concerning the factors that affects the effectiveness of a given law is
an assessment of the acceptability of the development plan on the Taal volcano
island in Talisay, Batangas. The town has long been proud of having the alluring
panoramic view of the blue crystal water of the lake and the Taal volcano but
despite its proximity to the enticing lake and volcano very minimal income
revenue is being generated from it, this is greatly attributed to the lack of tourism
facilities. The approved tourism plan of the Municipal Government of Talisay is set
to create amenities for tourist visiting the area and boost the tourism potential of
the town but like any other development plans it also has disadvantages for it
would bring drastic changes to the town. The study proved that the level of
acceptance of the people on the implementation of laws would greatly affect its
effectiveness. Residences of the Municipality of Talisay, Batangas highly
accepted the approved development plan of their government despite its
disadvantages. Proper information dissemination would lead to better acceptance

thus creates harmonious relationship between the people and their government
towards citizen participation and effectiveness of policies implemented.
In this study the researchers are ought to prove the effects of the various factors
used in the previously cited studies on assessing the effectiveness of the new sin
tax law by measuring the publics awareness on the mechanism, implementation
and objectives of the said law along with the level of acceptance of the public
especially the smokers who will be greatly affected of its disadvantages and by that
acceptance they are willing to give up their vices to participate to the effectiveness
of the new sin tax law .

Foreign Litetature

In 2009 the United States congress passed a law called Children's Health Insurance
Program Reauthorization Act of 2009 also known as CHIP. It was expanded to
provide for impoverished children from families who cannot meet the qualification
of medical aid of the state by increasing taxes that are being imposed in cigarettes.
The increased revenue from tobacco taxes will be utilize so that the government
would be able to afford to include families with up to three times the federal
poverty level as well as children from high-income families in New York and New
Jersey. The expansion also covered dental and mental illness that previously could
not. The rationale CHIP is parallel to the rationale of the ratification of RA 10351
which serves the same purpose, to increase revenue of the government to be able to
increase funding for Healthcare.
The taxation of alcoholic beverages is another consistent feature of European
countries, although the rates themselves vary considerably between countries. This

can be seen clearly for wine, where nearly half the countries have no tax at all, but
one in five countries have a tax rate above 1,000, adjusted for purchasing power.
Pianos, yachts, playing cars, medicine, alcohol, tobacco, beards, windows, carbon
dioxide, lap dancers, airline tickets, petrol, salt, chocolate and tea., all and more
have been taxed by impecunious governments. Commodities which are considered
sinful or unhealthy traditionally attract the heaviest duties and it is these that are
the focus of this paper.
It is easy to assume that sin taxes, like all other taxes, exist to raise money for the
government and history gives us little cause to dismiss that assumption. Sin taxes
have an uncanny habit of being imposed when politicians need to find cash
quickly, particularly during wars. Beer duty increased tenfold in Britain during the
First World War and rose sharply again during the Second World War. The USA
fought World Wars, the Civil War and the War of 1812 on the back of alcohol
taxes. In Germany, taxes on cigarettes rose dramatically during the Second World
War, particularly in the later years, until they made up 80 to 95 per cent of the price
of a pack.
Sin taxes can be portrayed as optional user fees on luxuries. The commodities
targeted by sin taxes usually have an inelastic demand and are disproportionately
consumed by minorities. This makes them popular with majorities, particularly
when the majority is assured that the money raised will be earmarked for a good
cause. A survey of Israelis found that 60 per cent would support the redistribution
of wealth from smokers and overeaters to those who keep healthy habits. A 2008
poll of New Yorkers found that 52 per cent would support a soda tax, but this rose
to 72 per cent when told the money would be used for obesity prevention.
The Philippines new sin tax law shares the same principle with other sin taxes in
various countries mentioned above. It is levied on cigarettes and alcohol because
they are tagged as sin products not only because they are luxurious but they are
proven to be detrimental in to ones health, thus its implementation would not only
be focused on generating revenues but also to deter individuals from consuming
this commodities because of its harms. This study is set to measure the
effectiveness 10351 based on how the people would support its implementation
given its purpose.

Foreign Studies

Sin tax is a tax levied on a certain goods and services that are seen vices, such as
alcohol, tobacco and the like. Sin tax is used for taxing activities that are
considered undesirable. These types of taxes are levied by the government to
discourage individuals from partaking in such activities without making the use of
the products illegal. Like other taxes, sin tax also provides a source of government
revenue.
In a study conducted by the Adam Smith Institute Sin taxes on cigarettes and
alcohol are designed to boost revenue, not improve public health because A heavy
smoker or an alcoholic is unlikely to reduce consumption because of a price rise,
making sin taxes an unreliable way of reducing consumption or improving public
health. This present study will be focuses on the youth sector to determine that
with their level of engagement to these vices are to b e deterred not only on its
effects on their buying power but for the overall implementation of R.A.10351
Numerous econometric models on cigarette consumption have examined how price
affects the demand for cigarettes. According to a study done in the United for
every 1% increase in the price of cigarettes, there is between 0.3% and 0.5%
decrease in the quantity of cigarettes demanded. However, price is not the only
determinant factor in the demand for cigarettes. Another important variable is
income. The income elasticity of demand for cigarettes is often calculated along
with the price-elasticity. Some of the first studies on the demand for cigarettes
concluded that cigarettes are normal goods because their consumption increases
with an increase in income. The present study is ought to prove this direct
correlation as its instrument will compare the consumption an demand for cigarette
before and after the implementation of R.A. 10351 considering that the study will
focus on the youth sector with consideration to their income and how would it
affect their consumption

Tobacco use is among the most important causes of morbidity and the leading
preventable cause of death in the US, with over 400,000 deaths per year. This

number accounts for more deaths than AIDS, alcohol use, cocaine use, heroin use,
homicides, suicides, motor vehicle crashes, and fires combined. The principal
policies to reduce tobacco use have been broad-based and non-targeted. Following
economic theory, governments have sought to increase the price of tobacco in
order to reduce consumption. Indeed, one of the most successful policies to reduce
tobacco use has been tobacco taxation, helping to reduce use by over 50% since
the mid 1960 s, which has been suggested as one of the most successful public
health interventions in the 20th century. Following recommendations from the
IOM and other groups, recent large increases in tobacco taxes have been made. For
example, in April 2009, the largest federal excise tax in US history went into
effect, bringing the average combined federal and state rates to over $2 per pack.
However, these large changes in policy have not produced commensurate
reductions in tobacco use, which has been largely unchanged for the past 20 years,
varying between 20% and 25%. Indeed, there has been important heterogeneity of
the impacts of the policy between broadly defined socio-demographic groups, such
as by age, gender, race, and socioeconomic status. There is also emerging evidence
that tax responses may be related to self control and other characteristics. The
sources of these heterogeneous responses are not understood by social scientists or
policymakers interested in both further reductions in use as well as enriching
theoretical understandings of the complex determinants of use and cessation.
Specifically, the large differentials in responses have not been fully examined or
elucidated in order to predict individual differences and discover why taxation does
not seem to work for everyone.
.
The study will focus on specific demographic which is the youth because the
researches think that this is the time where people start engaging into vices and that
deterrence can likewise be attained for they are still vulnerable to the changes in
price concerning their income. Implementation of the new sin tax law here in the
Philippines would also bring the cigarette tax to its all time high but because
cigarette smoking is already integrated to everyday lives of this consumer, there is
no assurance that they will respond to the law and putt off cigarette smoking hence
will be affected by the factors concerning the effectiveness R.A. 10351

Local Literature
In a study conducted by Snowdan (2012), taxes on tobacco and alcoholic
beverages are doubly regressive because they are disproportionally consumed by
people on lower incomes, or the poor. A heavy smoker or an alcoholic is unlikely
to lessen consumption because of an increase in price; making sin taxes an
unreliable way of reducing consumption or improving public health. Thus, an
increase in tobacco prices has a little or a small effect on using these vices because
it is inelastic. The objective of this paper is to know if sin tax levied on tobacco
really discourages the mass, especially the poor, from smoking and measure the
effectiveness of R.A. 10351
In the first phase of the implementation of R.A. 10351, the increase of cigarette
prices is being felt around the country and it causes for the commoners to not go in
their normal habit of buying these. Sidewalk vendors raised their selling prices
for a stick of cigarette on the day the controversial sin tax reform law takes effect,
and even before the first batch of tobacco products actually carrying higher excise
taxes hit the market. a homegrown marketing concept of selling by the smallest
denomination which in this case is a cigarette stick cigarettes were selling on the
street 16.66 percent to 33.33 percent more than the old pre-sin tax prices less than
24 hours earlier. It clearly states that the law punches its objective of making
people discouraged with these vices. The law which was enacted as a health
measure to discourage smoking is expected to generate additional revenues during
the first year of implementation, 15 percent will support tobacco farmers and the
industry and 85 percent will go to the Health budget
.
The smoking ban under RA 9211 (Tobacco Regulation Act of 2003) is still facing
challenges in local implementation particularly in public smoking and in the sale of
cigarettes to minors. Smoking has become a public health issue since it has been
proven that nicotine is dangerous to your health. However, the daily violations of
local anti-smoking ordinances and the blatant disregard of the warning printed on
every cigarette pack is a testament to the stubbornness of human beings.In the
Presidents speech during the signing ceremony for RA 9334, he called the Sin Tax

law an early Christmas gift to millions of Filipinos that he predicts would finally
be discouraged from smoking and drinking because it would already be too
expensive to indulge in The medical community, perhaps out of sheer frustration,
supports the bill fully in the hope that economics would succeed where evidencebased medical practice had failed miserably. Perhaps most of the doubt and
uncertainty that surrounds this law is related to its implementation. No matter how
promising the reforms on excise tax rates seem it is only with strict implementation
of the provisions of the law that its projected revenues, and the benefits from the
programs the revenues will be funding, will be realized. This paper focuses on the
effectiveness of the implementation of RA 10351,its potential to bring reform is
undoubted but the problem of effectiveness would be on how much awareness and
acceptability people has on the implementation of the said law that is ought to be
proven.