Think tank: Big-time increase in cigarette taxes to force smokers to quit

29 November 2016:

Public health policy think-tank HealthJustice Philippines Monday pushed for a single-tier tax system for tobacco products, saying other proposed systems would not make smokers quit.

HealthJustice, which won the Bloomberg Award for Global Tobacco Control in 2012, said the industry-proposed two-tier tobacco tax system, which assigns lower tax rates to cheaper cigarettes or those on the “lower-tier,” would not be effective at curbing smoking.

“The two-tier tobacco tax system that the tobacco industry has been pushing for is ineffective and will not encourage smokers to quit or reduce consumption of tobacco products,” HealthJustice consultant Bianca Bacani said in a statement.

Based on government projections, the current multi-tier tax system would eventually shift to single tier by going through a two-tier stage first.

For example, a two-rate structure of P14 and P30 per pack of cigarettes would be implemented for a period of two years, moving on to a uniform rate of P30 per pack on the third year.

“If we don’t make tobacco products substantially more expensive, smokers will continue to shift to cheaper cigarettes instead of shift to a healthy lifestyle,” Bacani said.

She said smokers would sustain their habit and keep smoking. They would even reduce the number of cigarettes they consume.

“This is called downshifting, and it has taken place in many countries after they imposed the two-tier tax tobacco tax,” Bacani said.

HealthJustice also noticed that, as early as 2012, the Department of Finance reported that downshifting in alcohol and tobacco products caused the government to lose P32 billion in revenues.