Philippines

The government in the Philippines has again announced its intention to raise excise taxes on liquor and cigarettes. Should the House Bill 3465 pass, the price of local cigarettes could increase by 82.9%. The proposed increases are supposed to raise Php60 billion (US$1.37 billion) in additional tax revenue for the government.
However, higher taxes primarily achieve a huge increase in smuggling and illicit trade, depriving the government of revenue from excise taxes and import duties it would have otherwise collected, and this correlation holds true for any country.
When excise duty was increased by 135% in Singapore between 2000 and 2005, it resulted in an initial spike in revenue, followed by a continuous decline due to smuggling. Smoking levels were unaffected.
In Malaysia, excise duties increased at the rate of 21% per year from 2001 to 2009, but revenue increase was much lower than expected due to proliferation of smuggling. Almost two out of every five cigarettes sold in Malaysia were smuggled. Smoking levels were virtually unchanged.
According to the Inquirer, a popular daily newspaper, the Philippines would benefit from an Australian-style excise tax system, where excise taxes are raised in line with the Consumer Price Index. As a result, it is claimed, Australia has increased excise revenues and reduced smoking considerably.