The paper presents a survey of excise taxation on tobacco products in member-countries of the Association of the Southeast Asian Nations (ASEAN).
Among the ten (10) member-countries of the ASEAN, eight (8) countries are imposing the excise tax, excise duty or excise tariff on tobacco products, namely, Philippines, Brunei, Singapore, Vietnam, Lao PDR, Malaysia, Thailand, and Indonesia while two (2) countries are imposing excise tax-like structure namely the special merchandise of Cambodia, and commercial tax of Myanmar. Of the eight (8) countries imposing the excise tax, Philippines, Malaysia, and Thailand, are imposing a combination of specific and ad valorem tax rates. For the Philippines, however, it is mostly specific except for cigars, which is a combination of specific and ad valorem rates.
Countries imposing pure specific taxes are Brunei, Indonesia, and Singapore. A specific tax is a form of an excise tax, which imposes a fixed amount based on weight or volume capacity or any other physical unit of measurement such as per piece, per gram or per kilogram. On the other hand, Cambodia, Lao PDR, Myanmar, and Vietnam are imposing pure ad valorem rates on the tobacco products. An ad valorem tax is a form of an excise tax, which imposes a percentage rate based on selling price or other specified value of the goods.
In terms of tax structure, Indonesia has a complicated multi-tiered structure. Tobacco products are classified based on type of product, mode of production, production volume, and retail sale price.
For countries imposing specific taxes on cigarettes, when converted to Philippine currency, Indonesia has the lowest specific tax ranging from PhP0.06 to PhP1.13 per gram/stick, followed by the Philippines with rates ranging from PhP0.50 to PhP1.35 per stick. On the other hand, Singapore has the highest rate of PhP13.56 per gram/stick, followed by Brunei with rates ranging from PhP4.14 to PhP8.62 per gram/stick.
For countries imposing ad valorem rates on cigarettes, Myanmar has the highest rate of 100%, followed by Thailand at 85%, Vietnam and Lao PDR at 65% and 60%, respectively, while Cambodia imposes the lowest rate of 10%.
In the case of the Philippines, cigarettes are taxed per pack, i.e. either packed by hand or by machine, based on the net retail price per pack. It is noted that the country is moving towards a unitary tax rate on cigarettes by 2017 with a 4% annual increase in the rate in line with projected inflation.
