Significant tobacco tax increase and Duterte’s Tobacco Free Promise
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Legislators have railroaded a bill that allows cigarettes to remain dirt cheap in the Philippines, contrary to the Philippine health agenda and Duterte’s promise of a Smoke Free Philippines.
HB 4144 was approved without amendment during the second reading on December 5. It sought a P7 increase of excise taxes to P32 and P36 from the current P25 & P29 with marginal increases of 5% per year instead of marginal increases of 4% per year based on RA 10351,the current Sin Tax Law which is scheduled to bring taxes to a single rate of P30 in 2017. The bill was sponsored by Rep. Eugene de Vera of ABS Partylist and supported by all those in the super majority.
“There is an illusion of significant increase in taxes but in reality, this is a ruse to preempt ideal taxes for health that President Duterte, being a strong tobacco control advocate, is capable of calling for. If this is made in line with the Philippine Health Agenda to reduce harms of tobacco, tobacco taxes, it should be at least P40, hence significant enough to discourage smoking and bring Philippines out of the category of having the one of the cheapest cigarettes in the world. It should also call for significant annual increases.” said May Fernandez-Mendoza, President of HealthJustice Philippines. Another bill filed by Salceda pushed for P40 with P5 increase per year but was not passed during the plenary hearing.
In 2010, a HealthJustice study projected that, in order to achieve a periodic 10% reduction in smoking prevalence or save 200 thousand lives annually and reducing 500 thousand smokers annually, taxes should have reached a unitary rate of P30 by 2014, to be increased annually based on inflation and income growth. Irene Reyes of HJ recalls, “However, the deliberation of the Sin Tax bill went through a lot of compromise due to tobacco industry lobby, and was watered down such that the rate of P30 would take effect only in 2017. To make up for the lost lives, we propose a min of P40 excise tax per pack as a starting point in 2017.”
HealthJustice President Fernandez Mendoza also pointed out that incremental revenues from any tobacco tax increase should go back to health in the form of health promotion, to strengthen communities’ capacity to undertake health initiatives and to have healthy cities. “Investments must be made to prevent Filipinos from getting sick,” Mendoza added.
“Price of cigarettes in Philippines is cheap. If we want to protect youths, we need to break the P100 per pack price barrier,” said Dexter Galban of One for Nursing Empowerment, a group of nursing students from universities in the Philippines. Internal tobacco industry documents show that the tobacco industry targets the youth as replacement smokers. According to a survey conducted by HealthJustice, the youth will stop smoking if prices of cigarettes are at Php5-10 per stick or P100-P200 per pack. Price of a pack of cigarettes average at P36-65 per pack in the Philippines while it is between P100-450 in countries that are committed to deter smoking, such as Thailand, Singapore, Australia, and USA.
Smoking has also been established to contribute to poverty. A 2008 DOH study shows that the total economic costs for the four smoking-related diseases were estimated at P188B a year. The total collection from tobacco products averages at P120B a year and an average of Php 75 billion goes to health.