• Minimum cigarette price backed

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    A NUMBER of lawmakers are convinced that the best way to discourage people especially children from smoking and to generate additional income for the government is by imposing a higher minimum price for cigarettes per pack.

    Bohol Rep. Eleandro Madrona has filed a bill proposing a minimum cigarette price (MCP) intended to discourage young people from smoking.

    Under Madrona’s proposal, beginning January 2015, a minimum cigarette price of P38 per pack is set, increasing it to P44 by 2016 and P51 by 2017.

    In line with the increase in excise taxes, the MCP shall be raised annually by four percent effective January 2018.

    The sin tax reform law earlier paved the way for raising the prices of so-called “sin” products alcohol and tobacco and as a result the price of cigarettes was pegged at P15 per pack and will be raised to P18 effective in 2015.

    Madrona said the measure, if approved, will strengthen the “sin” tax law and the recently approved graphic health warning law, which requires all cigarette manufacturers to print health risk warnings against smoking on all cigarette packs.

    “The price discipline to be imposed would complement these existing laws and altogether discourage youth smoking” he added.

    House Deputy Speaker Sergio Apostol, also backed the proposed minimum price for cigarettes to strengthen efforts to reduce health risk among the youth.

    “I am sure the bill will also prevent a price war and curtail bigger companies from depressing cigarette prices to drive local firms out of the market,” Apostol said.

    Iloilo Rep. Jerry Treñas supports the measure and agreed that the proposed minimum price for cigarettes would greatly beef up efforts to dissuade people from smoking.

    The draft law imposes jail time of not less than six months nor more than five years and a fine ranging from P50,000 to P2 million on any importer or retailer who will sell below the MCP.

    If a business establishment commits a violation, both penalties shall apply in addition to suspension or revocation of business licenses or permits.

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    4 Comments

    1. Blake Rodriguez on

      Are our officials backing this proposal because of the good it could do, or are they doing so just to be bibo? Did they really study the pros and cons of this law? It sounds like this will do more harm than good.

    2. Before these lawmakers so quickly jump on the band wagon and support this new bill simply because it seems like the cool thing to do, they should really study the possible effects of approving the minimum cigarette price. This will more than likely bring more harm than good, as only the tax compliant manufacturers will abide by this. The illicit traders will simply continue selling their cheap products, and consumers will be more open to patronizing these cheap untaxed products.

    3. Dina Dela Cuesta on

      This will just open up new issues. First of, who will be tasked to monitor the retailers across the country? Imagine the amount of corruption this will lead to, as enforcers will try to extort from small business owners. Second, wouldn’t this encourage the illicit traders, as consumers continue to seek cheaper products?

    4. With minimum cigarette prices, this may cause more problems since consumers consumption shifts in favor of illicit products at very low prices, where overall consumption of cigarettes will not decrease and government’s revenues will suffer also. tsk tsk