The administration-backed bill seeking to increase anew the “sin taxes,” or the tax rates on tobacco and alcohol, is losing steam in the House of Representatives as sales of tobacco and alcohol products dropped to a dangerous 30 percent level in the past six months.

The House Committee on Ways and Means has decided to take a “wait-and-see” stance on the bill being pushed by President Arroyo following an admission by the Bureau of Internal Revenue (BIR) that tobacco and alcohol sales have been adversely affected by the economic slowdown.

Instead, the House panel chaired by Antique Rep. Exequiel Javier said proposals to impose a P0.05 centavos on “text messaging” have been placed on top of the list of priorities of the committee, adding that they are expected to vote on the measure in the next hearing.

“Even the DoF (Department of Finance) is having second thoughts that it agreed that there is a need to slow down a bit on the proposed adjustment in liquor and tobacco tax. With sales dropping to over 30 percent, there is a big possibility we might do more harm than good for this country,” said Ilocos Sur Rep. Eric Singson, committee vice chairman.

Singson revealed that one option being considered is to pass the bill but defer its effectivity to 2012.

“Implementation should depend on the economic situation. Tutal, tax rates were adjusted this year, in 2010 another 8 percent hike and in 2011 there will be another round of adjustments,” said Singson.

Singson said the text tax bill is the best option that would enable the government to get quick cash and partially solve its fiscal deficit problem, estimated at P250 billion this year.

Javier said the ways and means panel will concentrate in passing the text tax bills, but this does not necessarily mean that the “sin tax” rates will be dropped in the list of legislative priorities.

To be consolidated are the bills filed by Singson and Quezon Rep. Danilo Suarez, chairman of the House Committee on Oversight.

Singson’s proposal seeks to bar telecommunications firms from passing on the additional tax to customers.

Suarez, on the other hand, proposes the allocation of funds raised from the tax for computer education and laboratories.

Javier aired strong belief that majority of committee members would be backing the tax on text over the proposed increase in sin products.

The Antique lawmaker agreed that pushing for the “sin tax” would encounter difficulty as a result of the slump in sales.

Since the government was unlikely to squeeze out higher revenues from beer, liquor and cigarettes, Javier said the telecommunication firms offered the best source of instant cash for the government, which is facing a P250-billion deficit this year.

In Tuesday’s hearing, retired Supreme Court Justice Jose Vitug, a tax expert, said he sees nothing wrong with imposing additional taxes or fees on telecommunication firms.

For his part, Suarez said it was the duty of Congress, after granting franchises to the telecommunication firms, to make sure that the mobile phone providers live up to their duty of providing efficient services to their customers.

According to Suarez, telecommunication firms which have become rich from their business have become complacent in their services as seen from the chronic problem of drop calls and congested system that has led to long lags in the transmission of text messages.