Higher Taxes On Cigarettes Are Going To Be Reconsidered
Last week a global tobacco maker from Philippines, Manos Koukourakis, general manager of JT International, Inc. (JTIP), appealed to the Senate urging to reconsider the new tax reform which implies higher taxes on cigarettes.
He emphasized that the new tax reform on cigarettes was not a reasonable way out from the situation with smoking, as it would not contribute to less smoking incidence in the society.
Manos Koukourakis is strongly convinced that while the government believes that higher prices will deter people from smoking "the demand for cigarettes will remain, even after a change in tax".
Explaining his point of view Manos Koukourakis cited as an example such countries as Ireland and Malaysia. He stated that in these countries smoking remained prevalent despite a high tax on cigarette products. He added that in both countries the smoking incidence even increased despite a considerable tax increase. Besides, as he stated both countries experienced significant development in illicit trade.
Koukourakis revealed his opinion referring to the increase in taxes on cigarettes and presented his own view on the further development of the situation. According to his viewpoint the new reform will push smokers to buy cheaper or counterfeit products. "As a consequence, consumers would no longer be able to afford legitimate brands and they will tend to buy cheaper, non-duty or tax paid cigarettes, or worse, counterfeit products, which are not subject to quality control," he added. Thus the new reform will not appeal the consumers to quit smoking, on the contrary it will contribute to a more popularity of cheaper cigarettes.
Therefore Koukourakis urged the Senate to review the new reform on cigarette taxes as it will lead to the predominance of low quality cigarettes over the legitimate brands, which cause much more less health problems. And health is that sphere which should be taken into consideration first and foremost.