Revenue and Health Impacts of Restructuring Tobacco Excise Tax in the Philippines

A proposed law in the Philippines to increase the excise tax on tobacco by 215% will likely have implications for tobacco control and consumption, and public health, not just for that country but for the region.

Although half of deaths due to tobacco consumption currently occur in high-income countries, by 2030, 70% of such deaths are forecast to occur in the developing world. The World Health Organization's Framework Convention on Tobacco Control has responded to this epidemic by encouraging developing countries to reduce demand for tobacco through price and tax measures.

Southeast Asian countries are struggling with how to implement the main provisions of the Convention. The Philippines, where tobacco products are cheap and smoking is common, is proposing to increase the excise tax (an indirect tax on goods sold in the country) for tobacco by 215%. Other measures proposed as part of the new tax law include indexing the excise tax to inflation, adopting a unitary tax system, and earmarking taxes for the Universal Health Care program.

Researchers will collect data from a survey of consumer demand for tobacco products and analyze the reasons why people consume tobacco. As well, the research will produce a model of how market shares will change. This will allow for an analysis of the impact on tax revenues.

Findings will feed into an ongoing advocacy and media campaign aimed at informing policymakers of the revenue and health implications of the proposed tax reforms. The aim is to strengthen technical arguments for implementing new tobacco taxes.

Project ID

106832

Project status

Closed

Start Date

Saturday, March 17, 2012

End Date

Friday, May 17, 2013

Duration

8 months

IDRC Officer

Hallen, Greg

Total funding

CA$ 90,200

Countries

Far East Asia, Philippines, Central Asia, South Asia

Program

Food, Environment, and Health

Project Leader

Michael M. Alba

Institution

Action for Economic Reforms, Inc.

Institution Country

Philippines

Institution Website

http://WWW.AER.PH