Tax take from ‘sin’ products up by 16.2%
The excise tax take from so-called “sin” products such as tobacco and liquor further grew in June on the back of the implementation of the Sin Tax Reform Law, Internal Revenue Kim S. Jacinto-Henares said.
The latest Bureau of Internal Revenue (BIR) data provided by Henares showed that excise tax collections from locally manufactured cigarettes, distilled spirits and fermented liquor in the first half reached P53.45 billion, up from P45.99 billion in the first six months of 2014.
The end-June tax take from cigarettes posted the fastest year-on-year increase of 19.5 percent to P33.67 billion from P28.18 billion last year.
For fermented liquor, excise tax collections rose 14.6 percent to P13.76 billion from P12 billion a year ago.
Collections from distilled spirits. reached P6.02 billion in the first half, 3.71 percent higher than last year’s P5.8 billion.
The first-half excise tax take from sin products jumped mainly due to higher rates slapped this year under Republic Act No. 10351 or the Sin Tax Reform Law enacted in 2012.
Sin tax reform restructured the excise taxes slapped on alcohol and tobacco, with higher tax rates slapped on these products to discourage vice while also collecting more revenues to be poured into healthcare.
Also, the BIR has tightened its monitoring of tobacco manufacturers’ tax payments through the Internal Revenue Stamps Integrated System or Irsis. The tax stamp system will also cover alcohol products starting late this year, Henares said.
In 2013, the first year of implementation of the sin tax reform, the total incremental revenue from tobacco and alcohol products hit P51.17 billion. Last year, incremental revenue slightly went down to P50.18 billion.
The Department of Finance (DOF) noted that the Sin Tax Reform Law “fixed long-standing structural weaknesses related to the taxation of tobacco and alcohol products.”
In the first two years of its implementation, sin tax reform generated an additional $2.3 billion or P104 billion to finance the country’s universal health care programs, DOF data showed.
This year, the BIR aims to collect P1.674 trillion in taxes, of which P140.4 billion should come from alcohol, minerals, motor vehicles, petroleum and tobacco.
