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Tax Gap of Heated Tobacco Products in the Philippines
In April 2020, Philip Morris International introduced heated tobacco products to the Philippines when IQOS first went on sale online and in some independent retail outlets. In 2019, the tax code was amended to introduce a new tax category for heated tobacco (RA 11346). The tax system and rates were approved in January 2020 (RA 11467) and became effective on January 1st, 2020. As of January 1st, 2023, heated tobacco is taxed at PHP 32.5 per pack of 20 stick and is set to increase by 5% annually in 2024 and after.
The Philippines applies a pure specific excise tax system to cigarettes. The current specific excise tax rate is PHP 60 per pack of 20 cigarettes in 2023 and is set to increase by 4% annually thereafter.
Sources:
- Official Gazette: Republic Act No.11467 (Approved Jan 2, 2020): A Law
- Official Gazette: Republic Act No.11346 (Approved Jul. 25, 2019)--Introducing the excise tax on heated tobacco and vapor products, and increasing excise tax on tobacco products
Last updated Sept. 1, 2023