31 January 2016, Manila – The Southeast Asia Tobacco Control Alliance (SEATCA) asserts that former National Economic Development Authority (NEDA) Director General Romulo Neri inappropriately cited SEATCA’s report to buttress his support for a two-tiered cigarette excise system as proposed in HB 4144, claiming in recent media reports that a unitary tax on cigarettes is anti-poor.
“Tobacco taxation is globally recognized as one of the most effective measures to reduce tobacco use, protect public health, and reduce health inequalities,” said Ms. Sophapan Ratanachena, SEATCA’s tobacco tax program manager. “In this regard, economic and public health experts agree that unitary specific taxes bring the most benefit to the health of individuals and societies. In contrast, ad valorem and multi-tiered tax systems are prone to abuse by tobacco companies and make tobacco products more affordable to the youth and the poor. While the two-tiered tax system under HB 4144 may appear more equitable, in reality it will encourage the young and the poor to smoke lower-priced cigarettes, exposing them to the very real risks of addiction, diseases, disability, and early death. In other words, a two-tiered system is anti-poor,” she said.
“SEATCA is shocked that a former national economic development chief would claim that tax systems should be designed to allow the poor to maximize their income spent on cigarettes, as if cigarettes are a necessity similar to food, water, clothing, and shelter,” added Dr. Ulysses Dorotheo, FCTC Program Director of SEATCA. “By denying the clear link between tobacco and ill health and contradicting the fact that good health is a requisite for social development, Mr. Neri’s statements fly in the face of the Social Development Goals (SDGs) adopted in 2016 by the United Nations to eradicate poverty and promote human wellbeing.”
“The Tobacco Control Atlas by SEATCA records both the progress and the gaps in tobacco control in Southeast Asia. In the context of tobacco taxation, Brunei, Singapore, and, since January this year, the Philippines, are examples of international best practice with their unitary specific tax systems. In addition, all other ASEAN countries, except Indonesia, impose a unitary rate on cigarettes (whether ad valorem or mixed specific and ad valorem),” said Dorotheo, co-author of the atlas. “SEATCA therefore rejects Mr. Neri’s reckless misuse of information that misleads the public and supports a pro-tobacco position,” he continued.
SEATCA also reaffirms its endorsement of the Philippine sin tax reforms, because after their implementation, smoking declined, especially among the youth and the poor, the vulnerable sectors of our society, and the government was able to earmark funds for universal health coverage of poor families.
To build upon the gains of the Sin Tax Law, which is a shining example for other countries, the Philippine government should maintain the unitary structure and further increase rates to continually and substantially reduce tobacco use. “The 2-peso and 4-peso tax increases proposed in HB 4144 are pathetic,” said Ms. Ratanachena. “Why not increase the tax by as high as 10 pesos per stick in order to really discourage smoking?”
A recent monograph of the US National Cancer Institute and the World Health Organization has estimated the global economic costs of tobacco at USD 1 trillion annually and recommends stronger tobacco control measures, particularly taxation.