JV Ejercito 'disappointed' with lower tobacco tax

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Metro Manila (CNN Philippines, January 3) Senator JV Ejercito is not pleased with what he considers a low hike in tobacco taxes and he has somebody to blame.

"I'm sorry but I would not be surprised if the tobacco companies, Philip Morris, probably tycoon Lucio Tan had a hand in this allegedly," Ejercito told CNN Philippines' The Source.

Tan is behind Fortune Tobacco Corp., which entered a joint venture with international tobacco company Philip Morris in 2010. CNN Philippines is trying to reach the company for comment.

"They might file libel against me but I really didn't see it coming. And I have to be honest with you, I was disappointed... with the bicam rate," Ejercito added.

The bicameral conference committee composed of senators and congressmen opted for a mere ₱2.50 increase per annum in excise taxes on tobacco. Under the plan, a pack of cigarettes will cost ₱32.50 from until June 2018, ₱35 until December 2019, ₱37.50 until 2021, and ₱40 until 2023, with an increase in tax of four percent annually from 2023 onwards.

Related: Health groups to lawmakers: Raise tobacco tax to fund health care program

Ejercito hoped for higher taxes on tobacco in order to balance out lower taxes on fuel and sugar-sweetened beverages. He had pushed for P60 in excise taxes per pack of cigarettes.

"If you would look at rates in other countries just in Asia... we still have one of the lowest prices per pack of tobacco," he said.

However, Ejercito said he signed the reform law despite reservations that taxes on fuel and sugar were too steep.

The senator also warned of possible food inflation as an effect, but said he hoped he was "wrong with [his] apprehensions."