Cigarette prices may rise by 83% next year

The price of local cigarettes could go up by as much as 83 percent next year based on estimates drawn up by the Finance Department on the seven excise tax bills pending in Congress.

Finance compared revenue estimates and price increases under several proposals to reform the excise tax on alcohol and tobacco products now lodged with the House Committee on Ways and Means.

Finance said the price of local cigarettes could increase by 82.9 percent in 2012 if the government opted for House Bill 3465 filed by Batanes Rep. Henedina Abad and HB 3489 by Iloilo Rep. Niel Tupas Jr., both seeking to restructure the excise tax system.

House Bill 3465 seeks a uniform excise tax system and the indexation of tobacco excise tax to inflation, while HB 3489 wants to increase and unify the tax rate and adjust it annually to present values using the consumer price index.

HB 3183 filed by Quezon Rep. Danilo Suarez, which seeks to reduce cigarette classification to two-tiered rates, will translate into a 72.2-percent increase in the price of local cigarettes in 2012. HB 3059 filed by Batangas Rep. Hermilando Mandanas seeking an equitable sharing of costs and benefits in the alcohol and tobacco industry will push up the price of local cigarettes by 59 percent next year.

Finance further projected a 20.1-percent increase in the price of local cigarettes if the government adopts House Bill 2687 filed by Negros Oriental Reps. Jocelyn Limkaichong, George Arnaiz and Pryde Henry Teves. The bill seeks the indexation of the rates using the appropriate price index for tobacco and alcohol and proposes a unitary tax rate for each category of alcohol and tobacco products.