Buying Cigarettes
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'Higher cigarette taxes good for health, government'

Doubling the price of cigarettes by levying higher taxes on manufacturers will avert 3.5 million deaths in the Philippines aside from allowing the government to increase its revenues, the Asian Development Bank (ADB) said on Tuesday.

In its study titled "Tobacco Taxes: A Win-Win Measure for Fiscal Space and Health," the ADB said doubling the price of cigarettes in the Philippines would entail raising taxes by 343 percent.

The Manila-based lender estimated that a 50-percent increase in the retail price of cigarettes in the Philippines would enable the government to rake in $600 million (P24.639 billion) in additional revenues annually.

Aside from the additional revenues, raising the price of cigarettes would also reduce health expenditures and result in higher productivity among workers.

"In the absence of intervention, smoking will eventually kill about 267 million current and future smokers who are alive today in five Asian countries [including the Philippines]," the report read.

The ADB also estimated that there are 21.9 million smokers in the Philippines today of whom 18.3 million are male and 3.6 million are female.

A pack of cigarettes in the Philippines costs an average of P22 of which 41 percent go to the government in the form of tax.

The ADB said that even if there are declines in the revenues of manufacturers, these drops should be viewed in the context of overall increased revenues from economic growth, productivity, reduced health expenditures and other benefits of tobacco control.

"Economic gains from better adult health are much likely to be much larger than the small change in revenue," the report read.

The ADB said the findings of the study "strongly support a rationale for governments in the region to review their tobacco taxation policy."

Published: Tuesday, November 13, 2012

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