Sin tax found effective vs smoking–SWS

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The sin tax law has proven to be effective in reducing tobacco consumption among the youth and the poor, according to a survey conducted by Social Weather Stations (SWS).

The results of the Department of Health (DOH)-commissioned survey were released on by the health department as part of the observation of World No Tobacco Day today.

The survey, conducted in March and involving 1,200 respondents nationwide, was aimed at assessing the effects of Republic Act No. 10351, also known as the sin tax law, more than a year after its implementation.

Reduction seen

The study showed that the prevalence of smoking for those belonging to socioeconomic Class E, or the very poor, dropped from 38 percent in December 2012 to 25 percent in March 2014.

Across age groups, smoking prevalence among those belonging to the 18-to-24 age group was also reduced from 35 percent in December 2012 to 18 percent in March 2014.

“Although we’ve been only a year into the implementation of the sin tax law, we are glad to already see a decrease in smoking prevalence among the youth and the poor, the main groups that we aimed to protect through the law,” Health Secretary Enrique Ona said in a statement.

Insignificant decrease

The survey, however, also showed that while there was a reduction in cigarette consumption among population sub-groups, the overall smoking prevalence in the country had not significantly decreased since the law took effect.

Among smokers belonging to socioeconomic Class ABC, smoking prevalence went down from 25 percent in December 2012 to only 20 percent in March 2014 while Class D even went up from 26 percent to 27 percent during the same period.

There were also insignificant changes in tobacco consumption among other age groups, the survey showed.

Shifting brands

Health authorities said one possible reason for this could be the smokers’ shift to less expensive brands.

Based on the survey, 45 percent of smokers switched to another brand of cigarettes when prices increased.

Almost seven out of 10 (67 percent) Filipino smokers buy cigarettes per stick, making it more affordable than buying per pack. According to the survey, the median price of cigarettes per stick in the country is P3 in spite of the price increase.

“Reducing overall prevalence of smoking in the country will take some time. The implementation of the sin tax law is in its initial stages and we are very hopeful that it will reach its goal of reducing overall smoking prevalence in the country, as tobacco taxes continuously increase each year,” said Ona.

The DOH has expressed confidence that the effect of the sin tax law will also be felt later among other socioeconomic classes and age groups.

Raise taxes some more

The World Health Organization (WHO) is urging governments to raise the taxes on tobacco products.

“You increase the prices of tobacco, you will decrease the number of people smoking and decrease the number of deaths,” said Julie Hall, WHO country representative for the Philippines.

“The sin tax law that was passed is a great and very important piece of legislation. It will save lives. It will also increase taxes, which can be used for health benefits for all and particularly the poor,” Hall told a press conference yesterday.

Hall said the WHO was looking forward to January 2017, when unitary taxation on tobacco products will take effect.

The law provides for a gradual shift to unitary taxation to simplify the current multitiered structure for tobacco products and liquor by 2017.

“Once the single tax rate system is already implemented, we can expect a more successful effect of the sin tax law,” Hall said.

According to WHO data, tobacco constitutes one of the biggest public health threats, as it kills nearly six million people a year, with more than five million the result of direct tobacco use and more than 600,000 the result of nonsmokers being exposed to secondhand smoke.

Share of sin tax

The DOH said the sin tax law was now providing health benefits to Filipinos by contributing additional funds for the implementation of the DOH’s Kalusugan Pangkalahatan (universal health care) program.

The sin tax law mandates that a portion of the revenue collected from sin taxes should go to health care and the improvement of medical facilities nationwide. Part of the revenue is also to be allocated to projects for the benefit of tobacco farmers and workers nationwide.

The DOH has a computed share of P45.1 billion from the actual 2013 sin tax revenue collections.

The agency spent its share of the revenue on the expansion of PhilHealth (Philippine Health Insurance Corp.) coverage to 14.7 million poor families. The rest of the funds will go to upgrading state health facilities, officials said.

The sin tax law, which increased the taxes on tobacco and alcohol—the so-called sin products—was passed by Congress on Dec. 11, 2012, and signed by President Aquino about a week after.

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