Phillipines: Sin Tax Collections Climbed 25% in 2015

Source from:  The Standard 02/03/2016

Excise tax collections from tobacco and alcohol, or the so-called sin products, climbed 25 percent in 2015 to P141.84 billion from a year ago, the Bureau of Internal Revenue said Tuesday.

Latest data from the BIR showed the total sin tax collections in 2015 jumped from P113.81 billion recorded in 2014.

The BIR said the 2015 sin-tax collections were also 19.1 percent or P22.76 billion higher than the P119.08-billion target for the year.

The sin tax law, or Republic Act No. 10351, restructured the excise taxes 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 excise tax rate on a pack cigarettes with a net retail price of up to P11.50 was raised to P21 in 2015 while the tax rate on cigarettes with a net retail price of more than P11.50 was adjusted to P28 per pack.

In 2016, the tax rate was raised to P25 per pack of cigarettes with a net retail price of P11.50 and below and P29 for a pack of cigarettes with a retail price of higher than P11.50.

The tax for fermented liquors was increased to P21 per liter in 2016, for those with a net retail price of P50.60 per liter or below and to P23 per liter for those with retail price of higher than P50.60.

"Sin tax collections growing by a full quarter on year is no small feat. I expect Commissioner Henares and the BIR to continue to expand the fiscal space we need to invest more heavily in universal healthcare," Finance Secretary Cesar Purisima said when sought for a comment.

"With the figures in for its third year of implementation, sin tax reform is a lesson in good governance: sound policy and tough enforcement going hand in hand to deliver results for the uncovered and most vulnerable," Purisima said.

The BIR said collections from cigarette products in 2015 reached P100.02 billion, or 32 percent higher than P75.51 billion recorded in 2014. Excise tax from tobacco products also exceeded the P77.48 billion target by 29.1 percent.

Collections from alcohol products rose 12.12 percent to P41.82 billion in 2015 from P37.3 billion in 2014 and surpassed the P41.6-billion target collection for alcohol products last year.

Data showed that of the total collections from alcohol products, P28.26 billion were from fermented liquors, P13.51billion from distilled spirits or compounded liquors and P50 million from wines.

Total volume of withdrawals of tobacco products rose 9.1 percent in 2015 to 4.27 billion packs from 3.91 billion packs in 2014.

Withdrawals of fermented liquors also increased 1.4 percent to 1.43 billion liters from 1.41 billion liters in 2014. Enditem