By Marjorie Gorospe
QUEZON CITY, METRO MANILA--A recent study shows that cigarettes remain extremely affordable in the Philippines due to insufficient tobacco tax increase.
One reason is the price classification freeze that pegged the price groups of cigarettes to 1996 net retail prices (NRP) and to the absence of indexing the taxes to inflation, according to a study released by the Action for Economic Reforms and HealthJustice claimed.
While food prices have increased by 59% from 1999 to 2009, tobacco prices only increased by 34% in that same period, the study said.
“A stick of yosi (cigarette) is cheaper than an egg, or pandesal (local bread). It’s about the same price as kwek kwek (quail eggs with orange batter),” said Jo-Ann Latuja, co-author of the study.
Latuja also cited other studies indicating that an increase in cigarette prices helps reduce smoking among the youth.
Filomeno Sta. Ana III of the Action for Economic Reforms added that the price basis used for cigarettes is almost two decades old and that tobacco should be taxed according to the current NRP.
He further stressed that the tobacco tax system can be reformed by adopting a unitary tax for all cigarette brands, regardless of their prices.
“Yosi is more attractive to consumers who have little money to spare. And who are they? They are mainly the poor and the kids who become suki to these affordable death sticks,” Sta. Ana said.
The two groups are further urging the government to prioritize a tax reform on tobacco.
There are currently two pending bills in the House of Representatives. House Bill 3332 is urging the government to maintain the automatic excise-tax increases every two years from 2013 to 2017 while House Bill 3666 seeks to raise tobacco excise tax rates by adjusting these to inflation rates.
