A PROMINENT US economist has raised concerns that the Philippines’ tobacco excise tax rate has entered a “prohibitive range,” as indicated by declining government revenue.
Arthur Laffer, founder and chairman of Laffer Associates, an economic research and consulting firm, highlighted that the continuous increase in tobacco tax rates has surpassed the revenue-maximizing point.
He emphasized the need for the government to adjust tobacco tax rates to align closer to the revenue-maximizing rate, warning against further increases that could exacerbate revenue losses. “Of course, the government should take steps to realign tobacco tax rates closer to the revenue-maximizing rate. Doubling down with further revenue-losing tax rate increases is never a sensible solution to a tax revenue loss,” Laffer advised.
Laffer pointed out that the Philippines’ successive tobacco tax hikes have likely pushed rates past the revenue-maximizing point, leading to further revenue declines and increased illicit trade. “When a commodity becomes too expensive for consumers due to taxation, they will reduce consumption of that commodity or substitute away from that highly taxed commodity in part through consumption of illicit goods,” he warned.
Philippines Latest News, Philippines Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Philippine tobacco tax hits ‘prohibitive range,’ says US economistA leading American economist warned that the Philippines’ tobacco excise tax rate had reached a “prohibitive range,” as evidenced by declining government
Read more »
Philippines' Tobacco Tax Reaches 'Prohibitive Range', Economist SaysA leading American economist claims the Philippines' tobacco excise tax has entered a 'prohibitive range' as shown by falling government revenues. Dr. Arthur Laffer, founder of Laffer Associates, explains this using the Laffer Curve, indicating that higher tax rates may reduce revenue.
Read more »
Philippine President Expresses Concern Over Russian Submarine in West Philippine SeaPresident Ferdinand Marcos Jr. has expressed worry over the detection of a Russian attack submarine in the West Philippine Sea (WPS). The submarine, UFA 490, was sighted 80 nautical miles west of Cape Calavite, with the Philippine Navy deploying assets to monitor and address the situation.
Read more »
Prominent Market Experts Warn of Major Economic Risks AheadThree market visionaries have expressed significant concerns about future economic risks, including labor shortages, a potential new pandemic, and the rise of deglobalization, in a recent Bloomberg article.
Read more »
Prominent Market Experts Warn of Looming Economic RisksBloomberg highlights the concerns of leading market visionaries regarding the future economic risks influenced by the Ukraine conflict, inflation, and escalating fuel prices. Experts discuss labor shortages, the potential for a more lethal virus, and the trend towards deglobalization.
Read more »
Prominent Figures Warn of Upcoming Global Economic RisksThree leading figures in finance and technology warn of significant economic and health risks in the next decade, including labor shortages, a potential deadlier virus outbreak, and the trend towards deglobalization.
Read more »