SENATOR EMMANUEL D.

PACQUIAO
TOBACCO TAX
November 13, 2018

1. WHAT IS THE CURRENT TOBACCO TAX RATE?

Under the TRAIN Law, the tax rates, per pack of 20s, on cigarettes packed by hand
or by machine are:
 P32.50  January 1,2018 – June 30,2018
 P35.00  July 1, 2018 – December 31, 2019
 P37.50  January 1, 2020 – December 31, 2021
 P40.00  January 1, 2022 – December 31, 2023
 4% annual increase  January 1, 2024 onwards

2. WHY IS THE CURRENT RATE OF TOBACCO TAX NOT ENOUGH?

3. WHAT IS THE PROJECTED REVENUE OF THE PROPOSED TOBACCO TAX AT

P60 PER PACK? AT P90 PER PACK?

4. HOW MUCH OF THE SAID REVENUE MAY BE ALLOTTED FOR THE

UNIVERSAL HEALTH CARE PROGRAM?

a. HOW MUCH IS THE NEEDED FUNDING TO IMPLEMENT THE

UNIVERSAL HEALTH CARE, SAY WITHIN THIE FIRST 5 YEARS OF ITS
IMPLEMENTATION?

5. WHAT IS THE COST OF ECONOMIC BURDEN TAKEN FROM GOVERNMENT

BUDGET DUE TO TOBACCO-RELATED DISEASES?

First off, the economic burden caused by the top 4 tobacco-related diseases are:
(1) health care costs related to hospitalization due to tobacco-related disease;
(2) productivity losses due absence at work because of related illnesses including
recuperation; and
(3) potential income forgone due to premature death losses.

These economic burdens cost at P210 billion pesos. It is greater than the excise tax
collection from tobacco at P120 billion pesos.

5. WHY IS THERE A NEED TO RAISE TOBACCO TAX?

 SENATOR EMMANUEL D. PACQUIAO
TOBACCO TAX
November 13, 2018

Among ASEAN members, the Philippines has the second highest number of smokers, next to
Indonesia.

We still expect 1,000,000 NEW smokers by 2022 due to increasing incomes and
population.

Most of these new smokers will come from the most vulnerable sectors, such as the
youth and the poor.

1. The economic burden caused by the top 4 tobacco-related diseases alone,

such as in (1) health care costs related to hospitalization due to tobacco-related disease,
(2) productivity losses due absence at work because of related illnesses including
recuperation, (3) potential income forgone due to premature death losses, costs at
P210 billion pesos. It is greater than the excise tax collection from tobacco at P120
billion pesos.

2. Smoking is found to be a potential getaway to drugs. Smoking may have caused 1/3 of
4.8 million ever users of illicit drugs in 2015. Out of it, smoking may have caused 1.68
million Filipinos to use illicit drugs.

3. Rates approved in TRAIN are way below the proposal under S.B. 1599 or S.B. 1605.

4. Gains from Sin Tax Law of 2012 are continued to be felt.

Before the Sin Tax Law – Republic Act No. 10351 was passed and approved in December
2012, the percentage of “NEVER SMOKERS” in our population hovered between 54-55%
from 1998 to 2008.

In 2013, “NEVER SMOKERS” increased to 59.1% of the population, and further increased
to 63.7% in 2015. As a result, it was calculated that at least 70,000 deaths have been
averted since year 2013. With Senate Bill 1599, we will be able to further increase the
number of lives we can save.

5. This will serve as a source of funds for the Universal Health Care. It is projected that the
UHC will face a funding gap in its implementation. Health Secretary Duque reported that
the UHC bill will require an incremental revenue of P164 billion for the first year.
Revenues from additional tobacco tax will be significant to fill this gap.