Philippines – new taxes on tobacco products introduced

As of 1 January 2013, Republic Act No. 10351, which restructures the excise tax on alcohol and tobacco products, has been in force in the Philippines. The tax on cigarettes is now 12 Philippine pesos (P12), approximately US$ 0.3, per pack for those with a net retail price (excluding the excise tax and the 12% value added tax) of P11.50 and below. For those with a higher retail price, the tax is P25. The rates will go up to P17 and P27, respectively, in 2014, P21 and P28 in 2015, and P25 and P29 in 2016. There will be a single rate of P30 per pack starting 2017, rising by 4% every year thereafter.

The changes mean that that whereas under the old law there were four categories of cigarettes based on their retail prices and tax rates, there are now just two, with the new law providing for a uniform tax treatment beginning in 2017. The old levies ranged from P2 per pack for low-priced cigarettes to P28 for those classified as premium.

The law also allocates 15% of incremental revenue collected from the excise tax to programmes that would benefit tobacco farmers switching to alternative livelihoods. Of the remaining 85%, 80% will be allocated to universal health care under the national health insurance programme, the attainment of the Millennium Development Goals and health awareness programmes; and 20% will be allocated nationwide, based on political and district subdivisions, for medical assistance and health enhancement facilities, the annual requirements of which will be determined by the Department of Health.

More information is available from Dr Florante E Trinidad, WHO Office of the Representative in the Philippines (trinidadf@wpro.who.int)

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