‘Sin’ tax collection seen to top P100-B mark
The government’s tax collection from so-called “sin” products next year may breach the P100-billion mark for the first time due to the yearly increase in tax rates mandated by law.
For next year, the Department of Finance (DOF), parent agency of the Bureau of Internal Revenue (BIR), set the government’s excise tax collection target for cigarettes and alcoholic beverages at P104.8 billion, 22 percent higher than the P85.85-billion goal for this year.
Of the amount, P65.15 billion is expected to be collected from cigarettes, while alcoholic products will account for the rest.
Finance Secretary Cesar Purisima earlier expressed optimism that this year’s target would be achieved, if not surpassed, citing favorable figures in the first semester.
The BIR likewise is confident that this year’s target will be attained, shrugging off smuggling concerns which may affect tax collection.
BIR Commissioner Kim Henares said that the tax bureau so far has received little or no report of smuggling, and that growth in excise tax collection could even accelerate this year.
The tax bureau earlier reported that it collected P38.5 billion in excise tax on cigarettes and alcoholic products from January to June, up year-on-year by 46 percent.
It expects collection in the second semester to be bigger as products manufactured prior to January, which are not covered by the higher tax rates that took effect this year, are sold off and replaced by new stock.
Under the Sin Tax Reform law, which took effect in January, excise tax rates for cigarettes and alcohol will be increased every year over the medium term.
For cigarettes worth P11.50 a pack, the rate will rise to P17 a pack next year. For the more expensive brands, the rate will be increased from P25 to P27 a pack.
For fermented liquor worth P50.60 a liter, the tax rate will rise by up to P17 a liter. For the more expensive brands, the tax rate will be increased by as much as P21.
Before it was passed, the sin tax reform bill languished for 15 years in Congress. Cigarette manufacturers had strongly lobbied against the hike in tax rates, warning tax authorities of its adverse impact on business and employment.
But the BIR said the sin tax rates in the Philippines remained one of the lowest, even with the hike in rates. Michelle V. Remo
