Will Sin Taxes Deliver us from Diseases? An Initial Assessment of the Sin Tax Law

In 2012, sin taxes in the Philippines were re-structured, paving the way for high, unitary taxes by 2017. The restructuring was intended to discourage the consumption of tobacco and alcohol, thus addressing the concerns of high smoking prevalence and increasing incidence of non-communicable diseases such as diseases of the heart and malignant neoplasms. I propose a framework for tracking health status improvements and then use various population-based survey data to assess one pathway from sin taxes to better health, i.e., reduced tobacco consumption. Higher sin taxes in 2013 seem to have reduced total consumption by not more than 10 percent. A larger impact on cigarette consumption can be expected beyond 2013, particularly, in 2017 with uniform and higher tax rates. Systematic and coordinated monitoring of tobacco consumption is needed to ensure maximum and sustained health gains from sin taxes.

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