Philippines probes $126m in cigarette tax losses

Philippines probes $126m in cigarette tax losses

Blame it on the law of unintended consequences.

When the Aquino administration pushed Congress to raise the level of "sin taxes" on tobacco products last year, cigarette manufacturers argued that higher levies would create new problems for the government, like smuggling.

According to them, the resulting increase in cigarette prices would give more incentives to unscrupulous parties to smuggle in cheaper brands and meet the demand from less affluent buyers.

Today-almost one year into the effectivity of the Sin Tax Reform Law - their warnings have proved almost prescient.

Information provided by the country's largest tobacco manufacturer showed that the government may have lost as much as P4.4 billion (S$126 million) in tobacco excise taxes in the first semester of the 2013 alone.

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