Philippines: Excise Tax Collection Jumps 22%

Source from:  The Standard 12/01/2015

Excise tax collection from tobacco and alcohol products climbed 22 percent in the first 10 months to P105.5 billion from P86.48 billion in the same period last year, the Bureau of Internal Revenue said Monday.

BIR Commissioner Kim Henares said the agency's collection topped the P87.8-billion target for the 10-month period. "Healthy figures tell us that we increasingly have more means to invest in our people, especially on universal healthcare," she said.

"This also makes 2015 on track to have the highest sin tax collections in history, with 2014 bringing in a total of P114 billion for its full-year haul," the agency said.

Data showed "sin tax" collections　in October reached reached P14.5 billion, up 80 percent P14.5 billion year-on-year.

Tax take from alcohol products in October rose 12 percent to P3.7 billion, while cigarette products' excise taxes jumped 126 percent to P10.9 billion.

The sin tax law, or Republic Act No. 10351, restructured the excise tax on alcohol and tobacco products, starting January 2013, with the goal of shifting to unitary taxation by 2017.

It imposed annual adjustment on tobacco excise tax rates until 2017, when both low-priced and premium brands will have a uniform tax rate of P30 per pack.

The BIR said collections from cigarette products in January to October amounted to P72.2 billion, up 27 percent or P15.6 billion from the same period in 2014.

Collections from alcohol products, on the other, reached P33.3 billion, expanding 12 percent or P3.5 billion from year-ago figures.

The BIR said incremental revenues from the sin tax reform reached P48.1 billion, with tobacco contributing P35.4 billion and alcohol adding P12.7 billion to make the amount exceed the target of P39.1 billion by 23 percent.

This builds on the gains earned from the first two years of implementation, when sin taxes raked in P51.2 billion in 2013 and P50.2 billion in 2014, exceeding targets by 51 percent and 17 percent, respectively.

Incremental revenues from sin tax reform amounted to P149.5 billion.

Meanwhile, the volume of removals for cigarette packs increased by 6.55 percent to 3.2 billion packs. Fermented liquors increased 1.16 percent to 1.1 billion liters, while distilled spirits contracted 5.02 percent to 315 million proof liters.

"Slim growth figures on volume reflect continued depression of consumption, in keeping with the reform's health-oriented goals," the Finance Department said.

"Volume of removals for cigarette packs, for example, is noticeably deflated at 3.2 billion packs so far for January-October 2015, compared to 5.8 billion packs for the full year of 2012," the department said.

"The significant increase is largely attributed to the frontloading of removals by cigarette manufacturers because of the impending increase in excise tax rates on Jan. 1, 2016," Henares said.

"This being so, we will continue strengthening our tax administration and enforcement capacities to build on the gains we've earned with sin tax reform. We vow to consistently uphold the rule of law in ensuring sin products pay their fair share in building ourselves a healthier, more prosperous nation," Henares said. Enditem