Cigarette tax hike bill could pass Senate today

If senators pass this afternoon the latest committee version of a cigarette tax increase bill from the House, then smokers could see a 50-cent increase in tax upon the bill’s signing into law and another 50-cent hike in three years or in 2017.

The original House bill, authored by House floor leader Ralph Demapan (Cov-Saipan), increases cigarette tax from $2 to $4 a pack.

The latest version from the Senate Fiscal Affairs Committee would cut that increase in half and spreads it in three years.

“The committee thinks increasing the cigarette tax from $2 to $4 is too drastic. We’re recommending a gradual increase. I believe we have the vote at the Senate to pass the committee version of the bill,” Senate Fiscal Affairs Committee chair Jovita Taimanao (Ind-Rota) told Saipan Tribune.

Taimanao’s committee earlier proposed a $1 increase for two years after March 31, 2014, and another $1 hike thereafter to reach the $4 a pack cigarette tax.

But the latest committee version, according to Taimanao, imposes a 50-cent increase once the bill becomes law.

“The next 50 cents increase will be three years later. And then it would be up to future lawmakers whether they want to continue the increase the tax after that,” Taimanao added.

Sen. Paul Manglona (Ind-Rota), a committee member, wants stronger enforcement of tax laws to come with the proposal to increase cigarette tax.

A copy of the committee report was still unavailable as of yesterday, but it was already placed on the Senate session agenda, which was rescheduled thrice.

The Senate Fiscal Affairs Committee acknowledges the increase in non-communicable diseases in the CNMI and its negative impacts. But it also notes public comments that the original bill’s intent of increasing cigarette tax by $2 is “excessive and that it could potentially hurt businesses.” The committee said a gradual increase would be a compromise.

A 23-year-old San Vicente resident, who smokes some 10 sticks of cigarettes a day, said a 50-cent increase in cigarette tax is still bearable and won’t force him to quit smoking at all.

If anything, he said, he would at least try to cut back on the number of cigarettes he consumes every day.

“If you’re a smoker, it’s really hard to quit,” he added.

Others said imposing steep cigarette tax would force many to resort to buying illegal or smuggled cigarettes, which have lower prices.