Decade-old Sin Tax Law earns praise from WHO

THE Philippines’s tobacco-tax policies have earned kudos from the World Health Organization (WHO) as organizations marked the 10th year of the Sin Tax Reform Law (Republic Act 10351).

In a message to a forum, WHO Director General Tedros Adhanom Ghebreyesus said the Philippines is a great example for other countries as it proved that raising tobacco taxes can save lives.

Ghebreyesus congratulated and commended the Philippines “for putting this tax reform law in place in the face of enormous pressure from the tobacco industry.”

Last Friday, members of the Action for Economic Reforms (AER) and the Sin Tax Coalition (STC) and representatives from the WHO, Bloomberg Philanthropies, the Asia Foundation, medical societies, youth groups and other civil-society organizations marked the 10th year anniversary of the passage of RA 10351.

The Sin Tax Reform Law significantly increased the excise taxes levied on tobacco products and reformed the antiquated tobacco tax regime.

“[Smoking] is the leading cause of preventable death globally and raising tobacco taxes is the more effective tool to reduce its use,” Tedros said. “Taxes have a clear impact. More workers are trying to quit because of the high price of cigarettes.”

The WHO official added that since 2005, the Philippines has been an active party to the WHO Framework Convention on Tobacco Control.

Tedros said tobacco use has dropped from 70 percent in 2009 to 20 percent in 2021.

“This is great progress,” he said. “The WHO will continue to support you in your fight against tobacco.”

Four reforms

IN a decade, the Philippine government has passed four reforms increasing taxes on sin products.

Aside from RA 10351, there is also RA 10963 (the Tax Reform for Acceleration and Inclusion law of 2017), RA 11346 (Tobacco Tax Law of 2019) and RA 11467, which increases excise taxes on alcohol and e-cigarettes.

Citing the Global Adult Tobacco Survey conducted in 2021, the AER and STC said in a document that the number of Filipino adult smokers has significantly dropped.

The groups said the reforms achieved twin revenue and health objectives by tripling the country’s health budget and significantly lowering the prevalence of cigarette smoking among Filipinos from 28 percent in 2009 to 19.5 percent in 2021.

This means 2.2 million Filipinos have decided to quit smoking since 2009, the groups’ joint statement read.

“We can attribute this win to the four laws increasing sin taxes in the past decade, which have raised cigarette prices and deterred Filipinos from smoking.” the groups said. “As we commemorate the 10th anniversary of the Sin Tax reform Law, we can further raise the taxes on sin products to strengthen our commitment to enhancing the health and welfare of the Filipino people.”

Sustain, defend

STC Co-convener and physician Anthony C. Leachon said the sin tax law was the most important health reform passed in the last 10 years as the government received over P200 billion yearly in revenues from these reforms, with 80 percent allocated to public health services.

“The substantial revenue it generated greatly improved our fiscal standing. More importantly, we have lowered our smoking prevalence by a third and saved 6 million Filipinos from the health hazards of smoking,” he said.

“We commend the late President [Benigno] Aquino [III] and our champions from the Aquino administration for paving the way for these 10 years of remarkable reforms,” Leachon said. He also commends the Duterte administration “for building on reforms, legislating the consecutive increases in 2017, 2019 and 2020, as well as the passage of the long-awaited Universal Health Care Law.”

Leachon said the sin tax is the result of “a strong, committed, fruitful and productive collaboration among the health sector, civil society, the government, the Department of Health and Department of Finance.”

“It was not just a narrow or a small group of people advocating for an increase in sin taxes, but the whole of civil society,” he said.

“Most importantly, our main message is: while we joyfully celebrate the gains of the sin taxes, there is an urgent need to sustain, defend and further these reforms today,” Leachon added.

Covid pandemic

ACCORDING to Leachon, the weakness of the country’s healthcare system during the early days of the Covid-19 pandemic exacerbated the need for full implementation of Universal Health Care, which derives its funding from the sin tax.

“The pandemic exposed the need for healthy Filipinos to enable a healthy and booming economy. This gives us an impetus to further raise revenues and one way to do this is through sin taxes,” he added.

Meanwhile, House Committee on Ways and Means Chairman Joey Sarte Salceda vowed to work on the passage of bills further imposing higher taxes on these sin products.

Salceda said lawmakers already filed a bill imposing higher tax rates on electronic cigarettes; another tax bill putting alcomixes (alcohol mix) at par with beer tax rates.

“And soon, I will be filing a bill imposing a non-essential goods tax on distilled spirits and other beverages above P20,000 per bottle in price,” the lawmaker said. “That last item, of course, will help correct the problem with tax rates in distilled spirits, which is that they are too low considering that they are possibly the most harmful among all alcoholic products.”

According to Salceda, he is also studying a junk-food tax, as well as an updating of rates of the sweetened beverage tax.

“Obesity kills just as alcohol or tobacco kill,” he added.

The lawmaker added his committee will be working on smuggling issues, particularly in tobacco.

Salceda said he is also working on the problem of misclassification and the abuse of de minimis privileges for imported electronic cigarette products.

“In large online shopping sites, electronic cigarettes are apparently being classified as ‘toys’ or ‘electronics’ so that they can bypass health regulations as well as duties,” he added. “This, of course, is a mockery of the Sin Tax Laws.”


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