Republic Act No. 11346, which is the tobacco tax hike bill, has been signed into law by President Rodrigo Duterte. The law institutes a higher sin tax on both tobacco and vapor products, such as e-cigarettes. It was considered an urgent matter as the law redirects a portion of its total excise tax collection towards the Universal Health Care program.
The new taxes under the law imposes a Php 10 hike on cigarette packs in its first year of implementation. Cigarettes are currently being taxed at Php 35 per pack so that amount will be raised to Php 45 per pack by January 1, 2020. A Php 5 increase will follow each year, making the excise tax reach Php 50 by 2021, Php 55 by 2022, and Php 60 by 2023. From 2024 onwards there will be a 5% annual increase.
Vapor products and heated tobacco products will receive a tax of ₱10 per refill of vapor products less than 10 milliliters. The tax will increase by Php 10 for every additional 10 milliliters, implementing a Php 20 tax for 10.01 ml-20 ml then Php 30 for 20.
01 ml-30 ml and so on.
Executive Secretary Salvador Medialdea explained the rationale behind the move: “To address the urgent need to protect the right to health of the Filipino people and to maintain a broader fiscal space to support the implementation of the Universal Health Care Act, the President has signed into law HB no. 8677/ SB no. 2233 Increasing the Excise Tax on Tabacco Products.”
Taxes from the newly signed bill are expected to generate around Php 15 billion in revenue in 2020 and Php 140 billion by 2023.
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