Shift to Specific Cigarette Tax Linked to Decline in Revenue
The Philippines had two types of cigarette taxes in the past: one that adjusts to price changes and one that requires regular adjustments. After switching to the fixed tax, cigarette tax revenues decreased. This study looked at the impact of this change from 1988 to 2005 and found that the specific tax led to lower tax revenues. This suggests that the shift to a fixed tax system negatively affected cigarette tax collections in the Philippines.