Prevalence of smoking in the country remains high despite enforcement of the historic 2013 Sin Tax Law, according to professors of the University of the Philippines (UP).
Stella Luz Quimbo, of the UP College of Economics, said the implementation of the law resulted in the emergence of small tobacco companies that offered cheap cigarettes.
Calling it the “Mighty effect,” Quimbo noted that when the new sin tax rates were implemented, cigarettes under the Mighty brand became the cigarette of choice for mass-based consumers.
In her presentation titled “Does Taxing Sin Deliver us from Disease: An Initial Assessment of the Health Impact of Sin Taxes in the Philippines,” she said the two-tiered structure of implementation of the upward adjustment of taxes on tobacco and alcohol triggered a tobacco war.
As a result, Mighty cigarettes ate into the market share of Philip Morris and other major brands.
Quimbo, in a presentation during the 37th Annual Scientific Meeting of the National Academy of Science and Technology (NAST), said this was mainly caused by rise of small tobacco companies that came out with low-priced brands that gave Filipino smokers the capacity to continue their unhealthy habit.
“For as long as we don’t have a uniform tax rate, then that’s going to be a problem,” she said.
UP College of Medicine professor Antonio Miguel Dans said the unitary sin tax rate will be implemented in 2017.
“We wanted it to be unitary from the start. But it was a bargaining chip to the tobacco farmers, tobacco industry, to the northern bloc lawmakers,” Dans added.
According to him, the sin tax law was estimated to have prevented some three million people from smoking.
“The prevalence of smoking is high because tobacco is cheap, and we are flooded with promotional materials at an early age,” he said.