16 January 2025
16 January 2025, Manila – Public health groups denounced House Bill (HB) 11279 when it was filed in Congress on Tuesday, protesting that the bill undermines the Sin Tax Reform Law, which is recognized internationally for rapidly reducing smoking rates, while raising revenues to fund Philhealth premiums for the poor, senior citizens, and persons with disability.
Under the current law, tobacco taxes are set to increase by 5% annually. HB 11279 proposes to stop the tax increase in 2026 and to replace the 5% annual increase with a 6% increase every two years starting in 2027.
“This proposal by tobacco industry surrogates in Congress is not a solution to address illicit tobacco trade. Global evidence shows that corruption and poor law enforcement are the main drivers of illicit trade, not tax increases. Cigarettes, whether conventional or electronic, remain affordable. If tax increases are stopped, even if only temporarily, more Filipino youths will start smoking, which will result in more illness and healthcare costs, while the government will not collect additional revenues.” said Dr Ulysses Dorotheo, Executive Director of the Southeast Asia Tobacco Control Alliance.
“We should learn from Malaysia, which has not increased cigarette taxes since 2015 due to scare mongering by the industry about illicit trade. Even without tax increases, the industry continues to claim that illicit trade remains high. As a result, tobacco companies continue to profit, while the government has no new revenues,” revealed Dorotheo.
“30 years ago, in 1994, Canada reduced its cigarette tax rates as recommended by the tobacco industry in the face of rising illicit trade. The government then lost billions of dollars in tax revenues on top of the revenues lost to illicit trade. Worse, smoking rates that had been steadily declining for two decades increased, particularly among the youth. Only tobacco companies saw increased profits, but they were later convicted in court of defrauding the Canadian government of tax revenues and driving the illicit cross-border trade which had been the reason to reduce tax rates,” he added.
The Sin Tax Coalition called on all Filipinos to remain vigilant and oppose HB 11279, but they also called on the government to strengthen tax administration and law enforcement.
“A pause in raising tobacco taxes or a rollback in tax rates is a flawed and deceptive solution to address illicit tobacco trade. An aggressive crackdown on importers, distributors, and retailers who engage in tobacco smuggling can best solve this,” said Dr. Jaime Galvez Tan, former Health Secretary and HealthJustice Board Member.
“Investing in border security, customs modernization, and acceding to the FCTC Protocol to Eliminate Illicit Trade in Tobacco Products would have been a better policy direction,” said Dr Maricar Limpin, Executive Director of Action on Smoking and Health – Philippines.
“Pausing annual tobacco tax increases will only serve the tobacco industry,” added Limpin. “Even if revenues were realized from decreasing excise taxes, it would be like trading peoples’ lives for the marginal increases in government revenue, and it doesn’t make sense when you look at the social cost.”
Contact Information:
Ms Val Bugnot, Media and Communications Manager, SEATCA
Email: val@seatca.org
Mobile: +63 917 312 4600
About SEATCA
SEATCA is a multi-sectoral non-governmental alliance promoting health and saving lives by assisting ASEAN countries to accelerate and effectively implement the tobacco control measures contained in the WHO FCTC. Acknowledged by governments, academic institutions, and civil society for its advancement of tobacco control in Southeast Asia, the WHO bestowed on SEATCA the World No Tobacco Day Award in 2004 and the WHO Director-General’s Special Recognition Award in 2014. SEATCA is an accredited ASEAN entity and an official Observer to the WHO FCTC Conference of Parties.