Sustaining our gains in tobacco taxation

Last December, Economics for Health launched the fourth edition of its Cigarette Tax Scorecard, which studied cigarette tax policies in 171 countries, based on indicators including the absolute price of cigarettes, change in cigarette affordability, share of taxes in retail price, and tax structure.

The study found that most governments are failing to implement best practices in tobacco taxation, as the 2024 global average cigarette tax score of 2.01 points out of five has not changed significantly since 2022 when it was 2.02. Economics for Health, formerly known as Tobacconomics, noted that governments are not sufficiently raising taxes or updating them for inflation and real income growth.

The Philippines, however, is maintaining its position as a global leader in cigarette taxation, as reflected in the 2024 version of the scorecard: the Philippines had the fourth highest overall cigarette tax score in the world and the highest cigarette tax score in Asia, with 3.75 out of five, only trailing behind the UK (4.13), Finland (4.00), and Belgium (3.88).

Although the Philippines has not legislated higher excise taxes on cigarettes since the last tax scorecard in 2022 (the last cigarette tax reform was in 2019), it is the country whose score improved the most (+2.50) in the two-year time frame, thanks to a perfect score of five in the change in affordability and tax structure categories. The perfect score implies that cigarette prices are higher relative to income. Meanwhile, the high score in the tax structure category could be because in 2024, the 5% annual automatic indexation to inflation of cigarette excise taxes kicked in, a feature of the tobacco tax reform of 2019 or Republic Act (RA) 11346.

These wins and accolades are a result of more than a decade of hard-won tobacco tax reforms, starting with the Sin Tax Reform of 2012 or RA 10351, and sustained by two more tobacco tax increases during the Duterte administration.

While our past reforms allow us to excel on the global stage, local data shows that our cigarette taxes are failing to curb consumption.

In 2023, National Nutrition Survey (NNS) data from the Department of Science and Technology – Food and Nutrition Research Institute (DoST-FNRI) showed that smoking prevalence is on the rise again for the first time in a decade, jumping from 19% in 2021 to 24.4% in 2023.

The tobacco industry blames this increase in smoking prevalence on illicit tobacco trade, using this increase in prevalence to argue that tobacco taxes are ineffective in reducing consumption and that tobacco taxes should be lowered. But health advocates disagree: if smoking prevalence is going up, tobacco taxes should be raised even further to effectively curb consumption. A study done by Action for Economic Reforms in 2024 showed that illicit tobacco trade is as low as less than 1% in Metro Manila cities, and the high illicit trade in Mindanao cities is an outlier due to geographical factors and weak local enforcement.

The industry’s narrative on illicit trade is concerning, given the fact that in 2025, industry-aligned politicians of the 19^th Congress tried to lower tobacco taxes through House Bill 11360. In the 20^th Congress, industry-aligned politicians once again are filing a bill proposing to lower excise taxes, this time on vape products, a move that advocates are calling misguided and deadly for the youth.

Protecting the gains of tobacco taxes doesn’t only imply resisting a rollback and advocating for higher taxes on cigarette products — it also means pushing for stronger regulation and taxation on newer products like vapes and heated tobacco products (HTPs), products I’ve seen children as young as five years old using in our community in Quezon City. Nicotine addiction is now being peddled to children in shiny, attractive packages and flavors, and our legislators are pushing to make them even more accessible to the next generation. The call to action of civil society is clear: raise vape and HTP taxes now.

Pia Rodrigo is AER’s strategic communication officer.