Issue link: https://read.dmtmag.com/i/1543154
Tobacco Asia 19 Meanwhile, in Southeast Asia, the Center for Market Education (CME) re‑ cently estimated that ASEAN countries will lose more than US$11 billion in to‑ bacco excise revenue between 2025 and 2028 due to illegal trade—almost 8% of the region's yearly health budgets (see "Illicit Trade: The Criminal Economy Undermining Tobacco Harm Reduction" page 22). The figures are stark. Indonesia alone loses about US$1.68 billion annu‑ ally; Malaysia nearly US$770 million; the Philippines US$424 million, more than its entire annual disaster fund. As structural gaps grow wider, governments across the region are sharply increasing taxes in an effort to regain control, even if it risks fueling the very flow of illegal products they are trying to curb. The tension—between tax ambi‑ tion and market reality—is now shaping every major discussion about tobacco, nicotine, and public health. As new evi‑ dence emerges, it's clear that the world is entering a much more complex phase of excise tax policymaking. Policy colliding with reality In Brussels, at a recent nicotine industry forum moderated by Tamarind Intel‑ ligence managing director Tim Phillips, experts discussed a policymaking envi‑ ronment struggling to keep up with rapid product innovation. "For years, there was no innovation in tobacco," said British American Tobacco's (BAT) Christa Pels‑ ers. "Now we have an explosion of new products—governments are still trying to catch up." The European Commission's proposed overhaul of its Tobacco Taxation Direc‑ tive (TED), the first major update since 2010, would significantly increase minimum taxes on cigarettes and extend harmonized tax minimums to e‑cigarettes, heated to‑ bacco products, and nicotine pouches starting in 2028. The EU estimates that the update will generate €15 billion in additional annual revenue and reduce healthcare costs by an extra €6 billion. However, stakeholders warn that the proposal could destabilize the market if enforced too aggressively. The Commission is advocating for a 139% increase in the The Philippines loses about US$424 million in tobacco tax revenue each year—more than the country's entire annual disaster fund. Credit: Kguimela, CC3.0.