FORMER Senate President Franklin Drilon is bothered by the rising incidents of cigarette smuggling, saying this is “alarming” and must be stopped.
Drilon, author of RA 10351 or the Sin Tax Reform Law, said cigarette smuggling is depriving the government of tax revenues and runs counter to curbing cigarette consumption.
“I see it every day 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 non-tax-paid cigarettes. For me, this is very alarming,” Drilon said in a statement.
In 2012, Drilon was credited for having passed the landmark legislation that restructured the excise taxation of alcohol and cigarettes in the country, resulting in a more simplified taxation for the said products while imposing higher rates to generate tax revenues for the government.
This also earned Drilon praise from the anti-smoking community as 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 revenues 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,” Drilon said.
“At the same time, the total cigarette volume contracted by 17 percent for the same period,” he added.
According to the Bureau of Internal Revenue, excise tax revenues on cigarettes continue to decline year on year. In 2022, it declined 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 around P130 billion, which is significantly lower compared to the 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, 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?” he said.
During his stint at the Senate, Drilon authored several anti-smoking measures, including imposing additional cigarette excise tax and the placement of graphic health warnings on cigarette packs.
