MANILA -- The management of Philip Morris Fortune Tobacco Corporation (PMFTC) on Tuesday lauded the Senate's decision to pass the bill increasing further the excise tax on tobacco products.
PMFTC Inc. Corporate Communications head Dave Gomez, in a statement, said passage of the bill is a step towards ensuring funds for the government’s Universal Health Care (UHC) program.
He, however, warned the government of the possibility of higher illicit cigarette trade as a result of tax hikes.
He explained that once the measure has been signed into law it will be the 8th tax increase since 2012.
“The higher rate raises some concerns over unintended consequences. We call on the government to exercise vigilance to curb the illicit cigarette trade which may worsen as a result of this excise tax increase, and undermine government efforts to raise funds for the UHC,” he said.
On Monday, Senators voted 20-0-0 in favor of Senate Bill 2233, which not only increased excise tax on “heated tobacco products” but also “vapor tobacco products”.
Once signed into law, this measure will increase excise tax of a pack of cigarette from PHP35 per pack to PHP45 per pack by January 1, 2020 and to PHP60 per pack by 2022.
Refill of vapor products will be increased by a minimum of PHP10 for those that are less than 10 milliliters.
Gains from this measure is targeted to finance the UHC, which is seen to need about PHP257 billion in its first year of implementation.
Relatively, Gomez said they expect the government “to provide the appropriate safety nets for farmers, workers and retailers whose livelihood would be impacted by this new round of tax increase”.
“The Senate version is a positive step forward as it will enable smokers to switch to less harmful alternatives to cigarettes while generating additional revenues from previously untaxed e-vapor products,” he added. (PNA)
