Static By Marvin Tort The government over the years has been raising the excise tax on cigarettes for two reasons: to reduce cigarette consumption; and, to earn more revenues. Theoretically, a tobacco tax is a tax on smoking’s “negative externalities”: smoking-related health problems such as lung cancer, heart disease, and respiratory diseases that raise healthcare costs and lower labor productivity. While it can be argued that a high tax is anti-poor, and that by now cigarettes are probably over-taxed (with tax revenues exceeding related public healthcare costs), it appears to have done its work in cutting Philippine cigarette consumption. One study indicates that smoking prevalence fell fr... [Read more]