Solon says might be time to review tobacco tax laws, anti-smuggling measures

A SOLON said on Thursday that it could be time to reassess the country’s tobacco tax law alongside a review of the government’s efforts against smuggling.

“Is there such a thing as over taxation, to the point that we are actually rewarding smugglers, because of the huge taxation?” PBA Party-list Rep. Jericho Jonas B. Nograles said in a mix of English and Filipino at an online conference.

“There’s always a debate when it comes to taxing sin products,” he said.

Republic Act 11346, signed in July 2019, increased taxes on so-called “sin” products such as tobacco, e-cigarettes, and sweetened and alcoholic beverages.

Mr. Nograles, a member of the House Ways and Means committee, said there is a possible link between increasing tax rates for tobacco and smuggling, citing a study that shows that for every 10% tax increase, there is a 7% increase in illicit trade.

“As far as policies are concerned, I think the policies are there. We are in the middle of adjusting our enforcement, improving our enforcement,” he said.

“And the first thing that the smugglers and illicit traders would really exploit are the loopholes… between the different agencies. Hence, the technical working group’s first recommendation, as I presented earlier, is for the agencies to talk to each other so that we can streamline (rules against smuggling).” — Jaspearl Emerald G. Tan