Improving the implementation of tobacco taxation in Southeast Asia

Tobacco is a significant contributor to the rising global burden of non-communicable diseases. The Framework Convention on Tobacco Control, the implementation of which is a specific target (3.a) of the 2030 Sustainable Development Goals, recognizes that raising taxes is the most cost-effective tobacco control measure. However, tobacco tax evasion and the illicit tobacco trade can undermine the effective implementation of tobacco taxes.

In 2013, a landmark package of tobacco tax reforms implemented in the Philippines raised taxes by 825%, leading to declines in smoking levels, particularly among the young and the poor. The revenue raised by this initiative paid for health insurance premiums for 14.7 million poor families. The Philippines is one of the highest consumers of illicit cigarettes, and prevalence rates are still high at 23%. Researchers have shown that this illicit trade undermines price and tax controls on tobacco and must be addressed for further momentum on tobacco tax reform.

This project hypothesizes that the implementation of tobacco taxation in the Philippines can be improved by strengthening the local evidence base on tobacco tax evasion. Implemented by the Ateneo School of Government in Quezon City, Philippines, it will address the knowledge gaps on illicit trade dynamics that can undermine policy discussions on effective tobacco control. The project will also foster a network of economics researchers in the region who can apply methodological tools and gender-responsive policy analysis towards generating reliable evidence to inform tobacco control policy development. The research will generate independent data on the level and effect of tobacco tax evasion for the Philippines and, through the research fellow network, provide support for similar reform across Southeast Asia.

This project is funded through the Economics of Tobacco Control Research Initiative, a co-funding partnership between IDRC and Cancer Research UK, launched in October 2017.