Gov’t ‘sin tax’ take hits P50B

MANILA, Philippines–Additional tax collections from alcohol and tobacco products under the Sin Tax Reform Law hit P50.18 billion in 2014, exceeding the goal of P42.86 billion, Revenue Commissioner Kim S. Jacinto-Henares said on Thursday.

In a text message, Henares pointed out that last year’s incremental excise tax collections that came from the implementation of Republic Act No. 10351 was 17.07 percent above the target. This, however, was slightly lower than the P51.12 billion collected in 2013, BIR data showed.

The Sin Tax Reform Law, which was enacted in 2012, 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.

Data provided by Henares showed that last year, P39.39 billion in additional taxes were collected from tobacco products, accounting for the bulk or 78.5 percent of the total. Last year’s take from tobacco was lower than P41.82 billion in 2013.

Alcohol products contributed P10.79 billion in additional taxes in 2014, higher than the P9.29 billion collected in 2013.

The sin taxes slapped on alcohol and tobacco lifted the total excise tax revenues on these two products to P111.62 billion in 2014, about 10 percent more than the P100.93 billion collected in the previous year.

Henares said the BIR was set to roll out by the latter part of the year the Internal Revenue Stamps Integrated System (Irsis) for alcoholic beverages and distilled spirits, under which tax stamps would be affixed on liquor bottles, similar to an ongoing program on cigarettes.

Under the BIR order, all packs of cigarettes produced in the country must be affixed with tax stamps, so that only stamped locally made cigarettes should be sold in the market by March 1 this year. As for imported cigarettes, all packs must bear tax stamps starting April 1.

IRSIS is aimed at ensuring the collection of the correct excise taxes on tobacco and alcoholic beverages.

In 2014, the BIR collected P1.335 trillion in taxes, up by 10 percent from P1.217 trillion in 2013, but 8 percent below the goal of P1.456 trillion.

This year, the BIR aims to collect P1.674 trillion, of which P140.4 billion should come from excise taxes slapped on alcohol, minerals, motor vehicles, petroleum and tobacco.