THE House Committee on Ways and Means has announced a delay in its decision on a proposed moratorium on cigarette tax increases, citing the need to gather input from various stakeholders before determining its course of action.
The committee’s deliberation comes amidst alarming figures highlighting a surge in illicit cigarette trade and a rise in smoking rates, creating a complex economic and public health challenge.
The committee acknowledges a significant revenue shortfall of P129 billion over the past three years, attributed to the proliferation of untaxed cigarettes. A simple online search reveals the ease of purchasing bulk, illicit cigarettes at prices as low as one-third the cost of legally taxed cigarettes.
This readily available, cheaper alternative is believed to be a major factor in the revenue decline.
This situation contrasts sharply with recent findings from the National Nutrition Survey, which reported a 5% increase in smoking prevalence in the Philippines between 2021 and 2023.
While the survey attributes this rise largely to increased vaping, it also notes a slight uptick in adult smoking.
This discrepancy between rising smoking rates and plummeting tax revenues strongly suggests a significant shift from legal, taxed cigarettes to illicit, untaxed alternatives.
Before making a final decision, the committee will await a formal position from the Department of Finance, the agency responsible for implementing the country’s tax policy. The committee’s cautious approach underscores the need for a thorough assessment of the situation, balancing the need for revenue generation with the concerns surrounding public health and the fight against illicit trade. The committee’s next steps will be closely watched, as the decision will have significant implications for both the national budget and public health initiatives.
metrosundaily
