Senator slams push for tobacco tax moratorium amid decline in collection
MANILA, Philippines — The decline in the collection of excise taxes needs further study before a moratorium can be imposed, a senator said, as lawmakers consider halting the collection of these taxes due to decreasing revenue.
The Department of Finance (DOF) previously said excise tax collection has steadily decreased since 2022, even as the number of smokers has increased.
At a Blue Ribbon Committee hearing on the Philippines earnings a "Dirty Ashtray Award," Sen. Pia Cayetano questioned proposals to impose a moratorium on excise taxes.
Cayetano argued that the passage of the “Vaporized Nicotine and Non-Nicotine Products Regulation Act” contributed to the liberalization of vaping.
She noted that the law transferred regulatory authority from the Food and Drug Administration to the Department of Trade and Industry.
She also pointed out that such measures were likely factors in the rise of smoking.
Cayetano dismissed suggestions that the increase in smokers and the decrease in excise tax collection justify removing taxes.
“Palalabasain sa hearing ‘ay tumataas ang smoking, tanggalin nalang natin ang tax, hindi pala effective.’ Wow, ‘wag na tayo mag-aral (They will make it look like from this hearing that ‘smoking is increasing, let us just remove the taxes since they are not effective.’ Wow, let’s not study at all),” Cayetano said.
She pushed for a thorough analysis of the data to find out other reasons for why smoking rates have risen while excise tax collections have declined.
“Let’s not be blind. This is your solemn duty. If you’re not willing to do this, don’t work in government. If you want to be an advocate for a sin product, work for them, but don’t sit in this government chair and then be advocates for a sin product,” she said.
DOF's position
The finance department, meanwhile, has yet to take an official position on the moratorium but expressed willingness to listen to different perspectives.
Cayetano then criticized any suggestion that excise taxes should be redirected or removed altogether.
“In what universe [does] the DOF, which is tasked with collecting [and] raising funds, now come to Congress and say, ‘I don’t want the funds... I will take it there, where it is helpful to people for their health.'?” she said in a mix of English and Filipino.
In a separate interview, Finance Secretary Ralph Recto reiterated his department's openness to discussion.
“This is not a DOF bill; it is initiated by Congress. We're willing to listen to Congress… and listen to all stakeholders, including health advocates. We are also a health advocate. That's why we want more collections so that we can subsidize PhilHealth,” Recto said.
The DOF, Recto said, is looking for a “sweet spot” that balances concerns about illicit trade, tax collection and public health.
“We’re looking for that sweet spot also for vape. When taxes are too high, it’s more profitable also to smuggle,” Recto added.
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