For Immediate Release – Sin Tax Coalition
Civil society groups warn the public about the clever but deceptive proposal of tobacco companies to have a Minimum Cigarette Price (MCP) whose benefits accrue solely to them. Instead of a minimum price, the civil society groups argue that increasing the tobacco tax rate is most effective in deterring smoking and increasing government revenue.
The proposed MCP prohibits the sale of cigarettes below Php 44.00/pack with the supposed intention of preventing the youth from smoking.
However, Jose Endrinal, co-convener of the Youth for Sin Tax, explained that the MCP proposal is founded on cherry-picked information that deliberately overshadows the success of the Sin Tax Law to his fellow youth. “It’s a wonder why MCP proponents tag the Sin Tax Law as a failure. The same SWS survey they are using actually points to a reduction of smoking prevalence of the youth from 35% to 18%,” Endrinal said.
Moreover, the coalition explains that the bill is disguising itself as an anti-smoking measure but is in fact an anti-competition strategy. As the MCP settles at the price that is favorable for Philip Morris Fortune Tobacco Corporation (PMFTC), it would act as a tool to exterminate its local competitors.
Dr. Tony Leachon, head of the Philippine College of Physician (PCP) Foundation expressed his disappointment: “Why are they using the language of public health? Unlike what they imply, their objective has nothing to do with youth smoking. In fact it will result in even bigger profits for PMFTC, the company that produces the most widespread and most popular cigarettes currently consumed by the youth in the country.”
Dr. Leachon added that the increased tobacco profits could be used for activities such as amplified advertising to the youth that would then counter several tobacco control efforts.
Action for Economic Reforms’ Senior Economist Jo-Ann Diosana said: “We should not let the companies keep the profit. Make the tax PHP 44 per pack instead; that way, the gain from the tax goes to the public, unlike a minimum price wherein the gain goes to the tobacco company.” At present, the tax rate is PHP 21 for a pack cigarettes with a net retail price of PHP11.50 and below and PHP 28 for a pack of cigarettes with a net retail price above PHP11.50.
Diosana also noted that whereas the MCP will result to an estimated Php1.5 billion increase in VAT, increasing the excise taxes to PHP 44 quadruples the amount, which in turn can be channeled to finance public goods, particularly for health.
“We should not allow ourselves to be used as an instrument in their tobacco wars. Cheap cigarette prices can be solved not through favoring any company that creates the product that we are all against,” Dr. Maricar Limpin of FCTC Alliance Philippines (FCAP) explained.
Lastly, New Vois Association of the Philippines (NVAP) head Engineer Emer Rojas added that the proposal would only increase enforcement costs. “It is better to focus on enforcing compliance of the Sin Tax and Graphic Health Warnings laws”, he said.
The Sin Tax Coalition is composed of civil society organizations, medical professional groups, health advocates, economic think- tanks, and youth organizations, that supported the passage of the Sin Tax Reform Act (RA 10351).
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