I am in favor of raising such tax, but not at very high rates. The main consideration should be finding the optimum, not maximum, tax rate based on multiple goals advanced by the advocates of such proposal. I developed a graph for this argument below. But before my longer discussion, I am posting two reports here.
In a column in Philippine Star last February 02, 2012, Alex Magno wrote,
The DOF says government will raise an additional P60 billion in revenues by restructuring the existing excise tax system on cigarettes and tobacco. The agency proposes to raise tax rates on these “sin” products by as much as 1,000%.
What this means for ordinary consumers is that, within the next two years, the excise tax collected per pack of cigarettes will rise from the current P2.72 to P30. The price per pack of cigarettes will rise, in two years, from around P40 to somewhere close to P100. What this means for me, in particular, is that I will finally kick the habit. If I do that, government revenue from me in particular will drop from P2.72 to zero — not the P30...
