iQOS maker: Lower taxes to help wean Pinoys off harmful cigarettes

The Philippines’ largest tobacco firm has asked lawmakers to give an estimated 15 million Filipino smokers the option to switch to “less harmful” alternatives like e-vapor or smokeless tobacco by giving favorable tax treatments to these products.

Patrick Muttart, Philip Morris Fortune Tobacco Corp. (PMFTC) external affairs and communications director, said research indicated almost 60 percent of Filipino smokers were open to switching from cigarettes to products like the company’s flagship product called iQOS.

iQOs is an electronic device that releases the nicotine in cigarettes sans burning.

“Here in the Philippines, there are already more than 225,000 users of smoke-free products,” Muttart said in a statement delivered before a hearing of the Senate ways and means committee this week.

This percentage of Filipinos willing to switch away from traditional tobacco products translates a pool of up to 9 million people.

“For its part, government—through tax policy—can encourage quitting by incentivizing those who would otherwise continue to smoke to shift to smoke-free alternatives,” the PMFTC official said. “We believe this is wholly consistent with the principle behind ‘sin taxes’ and past practice in this country.”

The tobacco manufacturer has yet to officially launch iQOS in the Philippines, but there is already a large number of local users who source their products overseas or from the local gray market.

Lawmakers are currently debating another round of increases in excise on tobacco as proposed by the Department of Finance, along with tax hikes on other products like alcohol and petroleum, meant to help fund the government’s infrastructure buildup program.

Muttart told lawmakers his firm’s smoke-free products could also “contribute to securing the future” for the Philippine tobacco industry which, according to the National Tobacco Administration, supports two million people.

In particular, local tobacco called Philippine leaf is already being used in some smoke-free products.

“We believe there’s significant potential for the country to establish itself as a leading supplier of leaf for use in smoke-free products,” he said.

Furthermore, Philippine business process outsourcing (BPO) firms already provide global customer support to users of smoke-free products, which rely on electronic gadgets.

“As more and more people make the switch to e-vapor and heated tobacco products, we believe the demand for Philippine BPO support will increase,” he said.

“It is a well-established fact that tax is a way to nudge people to make better choices,” the PMFTC official said. “If we get this right, we will empower the millions of Filipinos who would otherwise continue to smoke to make better choices, and in doing so, we will create new opportunities to secure the future for tobacco farmers and workers.”