High cig tax to reduce smoking by 17: agency

SIMULATIONS developed jointly by the Departments of Finance (DOF) and of Health (DOH) along with the World Health Organization (WHO) indicate that the proposal by Sen. Emmanuel Pacquiao to increase excise taxes on tobacco products to P60 per pack will bring down cigarette consumption by 16.8 percent and lead 3.2 million adults to quit smoking.

Pacquiao’s measure--Senate Bill (SB) No. 1599--is similar to the DOF-DOH proposal of increasing the excise tax on cigarettes, regardless of brand or price, to P60 per pack in the first year of implementation and an additional 9 percent per year thereafter.

Finance Undersecretary Karl Kendrick Chua said during a recent hearing of the Senate ways and means committee on the proposal that simulations show that the threshold in which the cigarette consump-

tion would prove elastic is to tax it “above P73 per pack. This means that incremental revenue begins to fall if the excise tax rate is beyond P73 per pack.”

But Pacquiao’s proposal of P60 per pack would also be beneficial because it would prompt “the youth, the poor and other price-sensitive cigarette users to stop smoking,” Chua said.

Health Secretary Francisco Duque III told senators that evidence shows that the Sin Tax Reform Law of 2012, which raised taxes on alcohol and tobacco products, was effective in reducing smoking among Filipinos.

“The effects, however,

have plateaued; making the Philippines the third highest among ASEAN countries in terms of smoking prevalence,” Duque said during the same hearing by the committee chaired by Sen. Sonny Angara.

Duque said results of a simulation exercise developed jointly by the DOH, DOF and WHO estimates that the P60 per pack proposed tax rate will “avert approximately 713,000 deaths, and will result to 3.2 million quitters in adults.”

“This rate will also bring down smoking prevalence to 16.8 percent and help reach our non-communicable disease target,” Duque added.