The House Committee on Ways and Means in the Philippines has decided to lower the proposed annual tax hikes on cigarettes instead of imposing a one-year moratorium, citing a surge in illicit tobacco trade. The committee, chaired by Joey Sarte Salceda, acknowledged the need to address unintended consequences of previous tax increases, such as the growth of the illicit market, while still generating government revenue and deterring smoking.
AMID debates on the proposal imposing a one-year moratorium on tax increases for cigarettes and other tobacco products, the House Committee on Ways and Means on Monday decided just to lower the scheduled annual tax hikes on cigarette products.
A series of excise tax hikes for tobacco products has been laid out under a proposed bill aimed at increasing government revenues and addressing public health concerns. The adjustments, to be implemented gradually over a decade, reflect alternating increments of 2 percent and 4 percent starting 2026 until 2035. This was approved by the ways and means committee subject to style and amendments.
“Recent reduction in excise tax collection is an indication of increased illicit trade and an irrational tax regime for vape products,” she added. Citing the position paper of the Department of Finance, Finance Director Euvimil Nina Asuncion emphasized the importance of mitigating illegal activities that impact public health and revenue generation.
The DOF also supports the proposal for a unitary-specific tax rate for vapor products, citing its potential to improve tax collection efficiency and encourage compliance. However, Asuncion deferred to Congress regarding the specific excise tax rates.
TOBACCO TAX ILLEGAL TRADE PHILIPPINES HOUSE COMMITTEE REVENUE
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