Multi-sectoral groups buck minimum price for cigarettes

MANILA, Philippines - Various groups have opposed a bill in the House of Representatives seeking to set a minimum price for cigarettes, saying it is more of a profit strategy for the tobacco industry than a tobacco control measure.

In a joint statement, the Action for Economic Reforms (AER), Framework Convention on Tobacco Control Alliance Philippines, New Voice Association of the Philippines, Philippine College of Physicians Foundation, Philippine Society of General Internal Medicine (PSGIM), Woman Health Philippines Inc. and Youth For Sin Tax Coalition thumbed down to House Bill 5013 or the minimum cigarette price (MCP) bill.

While the MCP bill looks similar to the sin tax law in making cigarettes less affordable, the groups said it will “accrue the profits to tobacco companies instead of the public.”

The proposed MCP bill prohibits the sale of cigarettes below P44 per pack in 2016 with the supposed intention of preventing the youth from smoking.

The proposed measure sets at P38 the minimum price of cigarettes per pack this year. The floor price will then be increased to P44 next year and to P51 by 2017.

Jose Endrinal, of the Youth for Sin Tax, said the MCP bill is founded on “cherry-picked information that deliberately overshadows the success of the Sin Tax law to his fellow youth.”

“It’s a wonder why MCP proponents tag the Sin Tax Law as a failure. The same SWS (Social Weather Stations) survey they are using actually points to a reduction of smoking prevalence of the youth from 35 percent to 18 percent,” Endrinal added.

The measure is supported by Japan Tobacco International Philippines (JTI) and Bulgartabac Philippines, which submitted separate position papers to Congress. They said the bill will curb the sale of illicit cigarettes and will help improve the government’s fiscal position.

The cigarette firm Mighty Corp. had sought more time to study the measure but said that it “fully subscribed to the noble intention of the subject bill.”

Antonio Dans of the Philippine Society of General Internal Medicine said the proliferation of cheap cigarettes would be addressed with the Sin Tax Law’s provision on the unitary tax system by 2017.

Tony Leachon of the Philippine College of Physicians Foundation said the measure is misleading.

“Why are they using the language of public health? Unlike what they imply, their objective has nothing to do with youth smoking,” he said.

Leachon said this would result to bigger profits for tobacco firms.

Jo-ann Diosana of the AER said tobacco companies stand to gain more from the proposed price ceiling.

“We should not let the companies keep the profit. Make the tax P44 per pack instead; that way, the gain from the tax goes to the public, unlike a minimum price wherein the gain goes to the tobacco company,” she added.

At present, the tax rate is P21 for a pack with a net retail price of P11.50 and below and P28 for a pack with a net retail price above P11.50.

Diosana warned the MCP bill might result in an estimated P1.5-billion increase in value added tax, increasing the excise taxes to P44, four times the amount, which in turn can be channeled to finance public programs, particularly for health.