Prices of tobacco products to increase as Duterte signs excise tax hike bill into law

Published July 25, 2019, 10:59 PM

by Ellalyn De Vera & Richa Noriega

By Hannah Torregoza 

President Rodrigo Duterte has signed into law the measure raising the excise taxes on tobacco products and imposing duties on heated tobacco and vapor products.

Sen. Sonny Angara (Senate of the Philippines / MANILA BULLETIN)
Sen. Sonny Angara
(Senate of the Philippines / MANILA BULLETIN)

Duterte signed the tobacco excise tax hike bill as Republic Act No. 11346. The new law primarily provides a four-year graduated excise tax increase in order to help tobacco farmers slowly shift to other crops.

Sen. Juan Edgardo “Sonny” Angara, chair of the Senate committee on finance, welcomed the President’s signing of the bill into law, as it would help the government raise funds to sustain the implementation of the Universal Health Care (UHC) law, and at the same time, pursue a health policy discouraging Filipinos from smoking.

“We welcome the enactment of Republic Act No. 11346 or the increase in the excise tax on tobacco products. We worked on passing this measure as the chairman of the (Senate) ways and means committee in the previous Congress with the goal of generating additional revenues to help fund the gap for the UHC Act,” Angara said in a statement.

Angara said that apart from funding the UHC to provide all Filipinos with affordable and quality health care, the new law is expected to reduce the number of smokers by raising the prices of cigarettes, heated tobacco and vapor products.

“We want to discourage the youth from taking up smoking and also reduce deaths and disabilities brought about by smoking,” he explained.

“We thank the President for his support in pushing for the passage of this law,” he said.

The new law will raise the excise tax for every cigarette pack from P35 to P60 for the next 4 years. The starting rate of P45 would be implemented in 2020, then followed by P50 in 2021, P55 in 2022, P60 in 2023 and a five percent automatic increase by 2024.

Under the law, 15 percent of excise tax on locally manufactured Virginia-type cigarettes but not exceeding P17-billion will go to Virginia tobacco-producing provinces.  Five (5) percent but not exceeding P4-billion will be allocated to burley and native tobacco-producing provinces.

Angara had said it is imperative to provide a delicate balancing act in crafting a law that would reconcile the competing interests of the government, health advocates, and cigarette industry and tobacco farmers.