Philippines: Higher taxes for ‘sin’ goods urged

13 December 2022

By Eireene Jairee Gomez, The Manila Times

A coalition of medical societies, youth groups, and civil society organizations on Monday called for higher excise taxes on alcohol, cigarettes, e-cigarettes, and heated tobacco products.

In a joint statement marking the 10th anniversary of Republic Act (RA) 10351 or the Sin Tax law, the groups claimed that the law had made the Philippines a best practice example of tobacco tax policy.

“The fruits of the sin tax reforms are now here for us to witness. Evidence shows that the sin tax law has successfully discouraged smoking among Filipinos,” they said.

The 2012 reform, which raised taxes on so-called “sin” products, was followed by further tax hikes via the Tax Reform for Acceleration and Inclusion law of 2017, 2018’s RA 11346, and 2020’s RA 11467.

“Thanks to the sin tax reforms which were supported by a diverse coalition, the Philippines is now considered a global best practice site for its tobacco tax policy,” the groups said.

“In 2020, Tobacconomics’ ‘Cigarette Tax Scorecard’ ranked the Philippines as seventh in total performance in cigarette tax policy, the highest among all East Asian countries,” they added.

The prevalence of tobacco smoking in the country subsequently fell to 18.5 percent in 2021 from 22.7 percent in 2015. In 2009, the number was 28.2 percent.

The reforms led to higher cigarette prices, with the average cost of a pack of 20 rising from P29.60 in 2009 to P57.70 in 2015 and to P107.80 in 2021.

Sin taxes were said to have raised funds for the country’s health budget and facilitated the enrollment of indigent Filipinos in the National Health Insurance Program. Earmarked revenues made up 54 percent of the 2020 budget for the Department of Health and Philippine Health Insurance Corp.

“However, ten years later, despite all the gains from sin taxes, we face many new challenges in relation to health and the economy,” the groups said.

“We face a large fiscal deficit. The increase in spending and borrowing during the pandemic have narrowed our fiscal space,” they added

The government has yet to implement the Universal Health Care program across the nation as a funding gap currently stands at about P163 billion, they pointed out.

The rising use of e-cigarettes and heated tobacco products (HTPs) among the youth and the passage of RA 11900, which deregulates these products, is also “very alarming”.

“Our call is for the Executive to adopt sin taxes as a legislative priority, as it is incumbent on them to protect the health of our people, especially young Filipinos, from harmful products such as tobacco,” they said.

The groups lauded the filing of House Bill 5532, which seeks to raise taxes on e-cigarettes and HTPs and introduces new taxes on vaping devices.

“The evidence shows that sin taxes are an efficient, cost-effective policy which deters smoking and relieves our health system of the burden of tobacco-related diseases,” the groups said.

“As we transition to a new normal, sin taxes will also provide us the resources to rebuild and strengthen our healthcare system and recover from this monumental health and economic crisis.”

The joint statement’s signatories were the Action for Economic Reforms, Youth for Sin Tax Movement, Philippine Pediatric Society, Southeast Asia Tobacco Control Alliance, Philippine Legislators’ Committee on Population and Development, Social Watch Philippines, Aktibong Kilusan Tungo sa Iisang Bayan, and Health Justice Philippines.


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