'Even with sin tax, PH cigarette prices will still be lowest in Asia'

by Willard Cheng, ABS-CBN News

Posted at Nov 14 2012 05:13 PM | Updated as of Nov 15 2012 01:13 AM

MANILA, Philippines - The Palace disputed a paid ad alleging that the sin tax measure will increase tax  burden on cigarettes by 1,000 percent.

Presidential spokesperson Edwin Lacierda said the tax burden would only amount to 60 percent.
Lacierda said this is even lower than the recommendation of the World Health Organization Framework Convention Tobacco Control to place a 70 percent excise tax on cigarettes.
"If we are to pass the sin tax bill, the tax burden on the retail price would only amount to 60 percent. So it is even less than what is being proposed by the World Health Organization convention on tobacco control. In some other countries, it's already at 75 percent of retail price. So with the passing of the sin tax (bill), it will only be at 60 percent."
Citing figures, Lacierda prices of cigarettes would "still be among the lowest in the region" even if it reflect the new sin tax.
"For instance, just to give you an example, the lowest price (for) cigarette right now, a local brand, is P15. With the sin tax increase, it will be at P26. And in Thailand, a pack of the lowest-priced brand would be P72 and in Vietnam it will be P26. In Indonesia, the lowest price would be P48.50. So obviously it's still going to be the lowest in the region," Lacierda said.
He said tobacco companies "remain profitable wherever they are."
He added that 15 percent of the revenues from sin taxes will be allocated for "safety nets" for tobacco farmers.
"So if it is at P40-billion-assuming that we are able to generate a revenue of P40-billion-P6-billion of that will be for the tobacco farmers," Lacierda said.