EconomyEditor's PickRejoinder to the letter by Dr. Ulysses Dorotheo

October 31, 2021

1. “Clearly, there are less people smoking… contributed to the flattening of NCD mortality figures”

Yes, less smoking of legal tobacco as many smokers shift to illegal tobacco. Cong. Joey Salceda has the number — P30 billion per year of tobacco tax revenues gone due to illicit tobacco in the Philippines. See “PH losing P30B annually due to cigarette smuggling — Salceda” (Philippine Daily Inquirer, March 1, 2021).

Since taxes comprise about half of retail prices, that means some P60 billion in street value of illicit tobacco goes to the smugglers, criminals, terrorists and their protectors in governments. Are the more tobacco taxes groups (MTTGs) happy with this?

2. “failed to cite the World Bank publication on tobacco taxation and illicit trade… states that tobacco taxes play only a minor role in illicit trade.”

Tobacco taxes kept rising and government estimates of revenue losses from tobacco smuggling by the NCIPR-IPO (National Committee on Intellectual Property Rights-Intellectual Property Office): P19.9 billion in 2014, P17.9 billion in 2015, P20.25 billion in 2018. See “Special Report: Government cracks down on cigarette smuggling, counterfeiting” by Mary Grace Padin, Philippine Star, March 4, 2019.

3. “Singapore had legislated but not yet implemented its plain packaging law.”

Illicit trade in Singapore started even before plain packaging was implemented. Both legal and illegal tobacco would look the same, so the illegal can sell at very low prices, attract more smokers, not less.

4. “the economic costs of smoking for just four diseases are at least P210 billion per year.”

If MTTGs succeed in zero smoking of legal tobacco, meaning these tobacco excise tax revenues of P77 billion in 2019, P77.9 billion in 2020, P82.2 billion projected in 2021, and P94.8 billion projected in 2022 — become zero, zero contribution to UHC (universal healthcare), will they be happy? I doubt it.

5. “mouthpieces of the tobacco industry to misinform about tobacco taxation, plain packaging.”

Wrong. We are mouthpieces of limited government, low taxes, free trade, rule of law, and personal responsibility.

Is it possible that the Southeast Asia Tobacco Control Alliance and MTTGs are the mouthpieces of the Bloomberg Philantrophies lobby? Mouthpieces of more government, more taxes, health is not personal responsibility, only state responsibility.

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