MANILA – Malacañang yesterday contested claims by a paid ad that the sin tax measure will increase tax burden on cigarets by 1,000 percent.

"The appearance of that ad would imply that upon the passing of the sin tax bill into law, the increase will be immediately 1000 percent. That is incorrect," Presidential Spokesman Edwin Lacierda said.

Lacierda said the tax burden would only amount to 60 percent, which is lower than the recommendation of the World Health Organization Framework Convention Tobacco Control to place a 70 percent excise tax on cigarettes.

"If we are to pass the sin tax bill, the tax burden on the retail price would only amount to 60 percent. So it is even less than what is being proposed by the World Health Organization Convention on Tobacco Control,” Lacierda said.

He noted that in some other countries, the price of cigarettes is already at 75 percent of the retail price. Lacierda said that even with the implementation of the new sin tax, prices of cigarettes in the country would still be among the lowest in the region.

He explained that the current sin tax rate is at P2.72. Next year, it will be P12, and, after that, P22 until it reaches in 2016 to P32.

The lowest price for local brand cigarette is P15. With the new sin tax, this will be at P26, Lacierda also said. He said that 15 percent of the revenues from sin taxes will be devoted for "safety nets" for tobacco farmers.

"So if it is at P40 billion – assuming that we are able to generate a revenue of P40 billion – P6-billion of that will be for the tobacco farmers," he said.

The Philippines is a signatory to the World Health Organization Framework on Tobacco Control, in which member nations have recommended an excise tax on tobacco products of at least 70 percent of the price.*PNA

back to top