Tobacco taxes need ‘calibration’ to reverse decline in excise revenue

THE Philippine Tobacco Institute (PTI), an industry lobby, said taxes for tobacco need to be overhauled to contain the growing share of illicit tobacco in the market and ensure the government collects adequate sin taxes.

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"There is an urgent need to calibrate the tax rate to an optimal level and enhance enforcement and prosecution efforts so we can fully realize the benefits of the Sin Tax Law for both public health and government revenue," PTI said in a statement on Tuesday.

The PTI said illicit tobacco accounted for about 18.2% of the market, a record, at the end of 2024, up from 5.4% in 2020.

Taxes make illicit tobacco, whether smuggled or untaxed, attractive to consumers, it said, with tax-paid cigarettes selling for around P140 per pack, up to P100 more expensive than the untaxed varieties.