Last week, Representatives Victor Ortega (1st District La Union) and Eric Singson (2nd District Ilocos Sur) defended tobacco interests, arguing that there is no need to correct the excise tax on tobacco and cigarettes. They repeated the call earlier made by Phillip Nelson, President of Philip Morris and Fortune Tobacco Corp. This if-ain’t-broke-don’t-fix-it argument is wrong. The system is really in shambles: the rates are not keeping up with inflation; some brands are still taxed based on their 1996 prices; and we have a complicated four-rate tax structure.
“From a societal concern, I say yes to the idea of an increase in sin taxes….As you know, these sin products have a health burden on the people.”
This was the statement of President Noynoy Aquino (P-Noy). His statement was an explicit signal to legislators to pass a law that will increase sin taxes and rectify the errors in the present law governing sin taxes.
The law on sin taxes needs to be overhauled. The sin taxes are not indexed to inflation. And the excise taxes on tobacco products especially are so convoluted, resulting in further erosion of revenues.
We welcome the statement of President Benigno Aquino III to back reforms on excise taxes on sin products, including tobacco and cigarettes. In his statement, President Aquino said that, “From asocietal concern, I say yes to the idea of an increase in sin taxes.There are trade-offs. As you know, these sin products have a health burden on the people, and this health burden has a peso value.”
Year after year, tobacco-related diseases claim the lives of millions. Inthe Philippines alone, approximately 90,000 die every year or about 10 Filipinos every hour die from smoking-related diseases.  We believe that increased excise taxes, particularly on tobacco products, will not only address the economic costs by curbing tobacco usage, but also increase revenues for the government.