Philippines: Time to quit?

24 June 2019
Business Mirror Editorial

Cigarette packs contain warnings about the health hazards of smoking. And with so few public places where people are allowed to smoke, one has to wonder—why do people still smoke? With President Duterte’s imminent enactment into law of a bill imposing a higher tax on tobacco, the government is certainly hoping to dissuade more Filipinos from taking up the vice and to give smokers a reason to quit.

The bill, passed by Congress and waiting for the President’s signature, raises tobacco taxes by P45 in 2020, followed by a series of annual P5 increases until the rate reaches P60 in 2023. It also places a P10 tax for every 10 milliliters of vaping liquids—the “juice” used by e-cigarette smokers.

The new tax on cigarettes is expected to raise P30.1 billion, which can be used to help cover the funding gap for the administration’s Universal Health Care program.

A simulation made by the Department of Finance, Department of Health (DOH), and the WHO also showed that the measure would help prevent approximately 713,000 deaths and result in 3.2 million Filipino adult smokers quitting, bringing down smoking prevalence in the country to 16.8 percent from 23.8 percent.

There is incontrovertible proof that smoking kills. Seven out of the 10 primary causes of death in the country—stroke, cancer, heart attack, chronic lower respiratory disease, pneumonia and disease that occur around childbirth—are tobacco-related diseases.

The Southeast Asia Tobacco Control Alliance (SEATCA) said tobacco is the only product that kills half of its customers prematurely. In the Philippines, it said 10 people die every hour because of smoking-related diseases, which translates to 240 deaths every day or 87,600 deaths every year.

The Philippines is the third highest among Asean countries in terms of smoking prevalence. Smoking costs the country P188 billion yearly in healthcare expenditures.

According to the DOH, the Sin Tax Reform Law of 2012, which imposed a unitary tax rate of P30 on all cigarette packs starting 2017, proved to be the single most effective way of reducing smokers in the Philippines. The DOH is hoping the new tax increases on cigarettes would have a similar effect.

This is what “sin” taxes, or sumptuary taxes as they are sometimes called, are supposed to do: they are financial disincentives meant to turn off people from engaging in activities that harm them and the rest of society.

Sin taxes are not just about raising revenue for a cash-depleted government. It is not just a matter of where the government can make the most money the quickest. Or, at least, it should not be.

Granted, the government needs the money, and yes, cigarettes and tobacco products have been some of the largest sources of the government’s tax revenues. But the government also cannot afford to stand idle as citizens die prematurely because of cigarette smoking.

Raising cigarettes taxes yet again has never been this morally and economically defensible. With the enactment and implementation of the law, the government has to be more aggressive in stopping cigarette smuggling and counterfeiting activities, illegal operations that routinely proliferate with the imposition of higher taxes, and some of which have reportedly been taking place inside free ports and special economic zones.

Local governments also have to be stricter when it comes to implementing the President’s Executive Order 26, which prohibits smoking in enclosed public places and public-utility vehicles.

Foreigners currently living and residing in the Philippines are not exempted from the smoking ban. Many Filipinos, for instance, have been complaining of cigarette smoke filling the lobbies and corridors of condominiums where Chinese nationals live and work, and in the restaurants they patronize.

We know this is the subject of another editorial, but it bears repeating that the implementation of stricter tobacco control laws in the country applies to everyone and anyone in the Philippines. Authorities need to enforce the country’s laws equally and make everyone accountable.

Business Mirror