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Empirical measurement of illicit tobacco trade in the Philippines.

dc.contributor.author Abola, Victor
dc.contributor.author Sy, Deborah
dc.contributor.author Denniston, Ryan
dc.contributor.author So, Anthony
dc.coverage.spatial Philippines
dc.date.accessioned 2016-02-09T20:44:17Z
dc.date.issued 2014-12
dc.identifier http://www.ncbi.nlm.nih.gov/pubmed/26855640
dc.identifier.issn 1655-1516
dc.identifier.uri https://hdl.handle.net/10161/11601
dc.description.abstract Cigarette smuggling reduces the price of cigarettes, thwarts youth access restrictions, reduces government revenue, and undercuts the ability of taxes to reduce consumption. The tobacco industry often opposes increases to tobacco taxes on the claim that greater taxes induce more smuggling. To date, little is known about the magnitude of smuggling in the Philippines. his information is necessary to effectively address illicit trade and to measure the impacts of tax changes and the introduction of secure tax markings on illicit trade. This study employs two gap discrepancy methods to estimate the magnitude of illicit trade in cigarettes for the Philippines between 1994 and 2009. First, domestic consumption is compared with tax-paid sales to measure the consumption of illicit cigarettes. Second, imports recorded by the Philippines are compared with exports to the Philippines by trade partners to measure smuggling. Domestic consumption fell short of tax-paid sales for all survey years. The magnitude of these differences and a comparison with a prevalence survey for 2009 suggest a high level of survey under-reporting of smoking. In the late 1990s and the mid 2000s, the Philippines experienced two sharp declines in trade discrepancies, from a high of $750 million in 1995 to a low of $133.7 million in 2008. Discrepancies composed more than one-third of the domestic market in 1995, but only 10 percent in 2009. Hong Kong, Singapore, and China together account for more than 80 percent of the cumulative discrepancies over the period and 74 percent of the discrepancy in 2009. The presence of large discrepancies supports the need to implement an effective tax marking and tobacco track and trace system to reduce illicit trade and support tax collection. The absence of a relation between tax changes and smuggling suggests that potential increases in the excise tax should not be discouraged by illicit trade. Finally, the identification of specific trade partners as primary sources for illicit trade may facilitate targeted efforts in cooperation with these governments to reduce illicit trade.
dc.language eng
dc.relation.ispartof Philipp Rev Econ
dc.subject illicit trade
dc.subject tax evasion
dc.subject tobacco
dc.title Empirical measurement of illicit tobacco trade in the Philippines.
dc.type Journal article
duke.contributor.id Denniston, Ryan|0194850
pubs.author-url http://www.ncbi.nlm.nih.gov/pubmed/26855640
pubs.begin-page 83
pubs.end-page 96
pubs.issue 2
pubs.organisational-group Duke
pubs.organisational-group Staff
pubs.publication-status Published
pubs.volume 51


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