By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.
MANILA, Philippines – Implementing risk-proportionate taxes on smoke-free nicotine products such as vapes, heated tobacco, and nicotine pouches can strengthen government revenues, accelerate declines in smoking prevalence, and curb illicit trade by making less harmful alternatives accessible to adult nicotine users and less attractive to smugglers, according to two international economists.
“The Philippine government should adopt data-driven taxation policies that strike a balance between fiscal sustainability and public health goals. Find that sweet spot where you have just the right taxation, you discourage as many smokers as possible without losing them to illicit tobacco, and you collect revenues to implement [tobacco control] programs,” said Dr. Arthur Laffer, founder and chairman of Laffer Associates, an economic research and consulting firm.
Laffer, who served on President Ronald Reagan’s Economic Policy Advisory Board, authored the Laffer Curve theory, which demonstrates the tradeoff between taxation levels and the revenues governments can generate.
“Countries that have significantly lowered their smoking rates implement simplified, risk-proportionate tax systems that influence consumers to move away from combustible cigarettes and switch to reduced-risk alternatives,” said Prof. Ashok Kaul.
