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Tobacco firms chided for claiming excise tax will worsen due to smuggling

Tobacco firms chided for claiming excise tax will worsen due to smuggling

MANILA: Tobacco companies were chided by various health groups for allegedly spreading unfounded claims that the rise in excise taxes on tobacco products will worsen the incidence of smuggling in the country.

Insisting the public’s right to be provided with information on good health and wellness, HealthJustice Philippines and the Southeast Asia Tobacco Control Alliance (SEATCA) revealed that global evidence shows clearly that raising tobacco taxes saves lives and can be implemented without resulting in more smuggling.

The Philippine Sin Tax Reform implemented since 2013 that increased taxes on tobacco products resulted in about 1.1-illion Filipino smokers quitting as reported in the 2015 Global Adult Tobacco Survey (GATS), while bringing in from 2013 to 2016 P210 billion in incremental revenues used in different health programs of the Department of Health.

Bureau of Internal Revenue (BIR) Commissioner Caesar R. Dulay said the tobacco companies complained about the “proliferation of smuggling” following the effectivity of the Tax Reform for Acceleration and Inclusion (TRAIN) Act, despite the fact that the tax increase imposed was only P2.50 per pack or 12.5 centavos per stick.

A study conducted by the World Health Organization in over 75 countries shows there is no direct correlation between tobacco tax rates and smuggling.