Former Senate President Franklin Drilon, author of the Sin Tax Reform Law (RA 10351), expressed alarm over the rising incidence of cigarette smuggling in the Philippines.
“I see it everyday in television news and newspaper reports about the arrests being made by our law enforcement agencies against people who are engaged in the business of manufacturing and selling of non-tax paid cigarettes. For me, this is very alarming.” Drilon said.
In 2012, Drilon was credited for having passed a landmark legislation (Republic Act 10351) that restructured the excise taxation of alcohol and cigarettes in the Philippines resulting in a more simplified taxation for said products while imposing higher rates to generate additional tax revenues for the government.
This also earned Drilon praises from the anti-smoking community, and he was awarded the Medal of Honor by the World Health Organization Western Pacific Regional office in 2013.
“In 2012, I authored and fought for the passage of RA 10351 with the twin objectives of increasing government revenues and curbing smoking consumption. We immediately succeeded in achieving these revenue and public health goals because in 2013, the government was able to immediately collect P72 billion in tobacco taxes compared to P33 billion in 2012.
The total cigarette volume contracted by 17 percent in the same period, Drilon said.
According to BIR data, excise tax revenues on cigarettes continues to decline year on
year. In 2022, it went down by 9 percent followed by a steeper decline of 23 percent in 2023.
Last year, excise tax revenues declined by 26 percent or the equivalent of P130 billion, significantly lower thann P176 billion collected in 2021.
“Cigarette smuggling is a big problem for the government. Firstly, because it deprives the government of huge tax revenues, which can be used for various government projects and to fund Philhealth. Secondly, because it defeats our public health objective of bringing down smoking rates. How can we bring down smoking rates if people are still able to buy very cheap cigarettes similar to those of 2012 prices?” Drilon added.
During his term as senator, Drilon authored several anti-smoking measures including additional increases on cigarette excise tax and the placement of graphic health warnings in cigarette packs.
