Cigarette Taxes up in the Philippines

Cigarette excise taxes in the Philippines increased from PHP55 ($1.08)) to PHP55 per pack on Jan. 1, reports The Philippine Daily Inquirer. Under the tobacco tax law of 2019, they will continue rising by PHP5 per pack annually until they reach PHP60 per pack in 2023.  

Meanwhile, the excise tax rate on conventional freebase or classic nicotine vaping products increased to PHP55 per 10 ml from PHP50 last year. The rate for nicotine salt vapes rose to PHP47 per ml from last year’s PHP42 per ml.

Despite the coronavirus pandemic-induced recession in 2020, “sin” tax collections from cigarette and alcohol products rose to PHP227.6 billion from PHP224.6 billion in 2019. Actual 2020 collections exceeded the conservative PHP201.5-billion target, as lockdowns dampened sales and limited distribution of tobacco and alcohol products due to movement restrictions on non-essential goods.

Market leader Philip Morris Fortune Tobacco Co. estimates that illicit cigarettes increased their market share to 8.6 percent in 2021 from about 5 percent in 2020.

The Bureaus of Internal Revenue estimates that the 2.5 million illicit cigarette packs it confiscated last year deprived the government of about PHP123.3 million in tax revenues.

As of November 2021, law enforcement had apprehended 102 illicit cigarette traders and to seized 38,827 master cases of illicit cigarettes worth PHP1.3-billion.