Tax take from ‘sin’ products jumps 15.1%

Collections from the excise tax slapped on so-called “sin” products jumped 15.1 percent to P41.76 billion as of end-May, Internal Revenue Commissioner Kim S. Jacinto-Henares disclosed Monday.

The latest Bureau of Internal Revenue (BIR) data furnished by Henares showed that the excise taxes collected from tobacco products, fermented liquor and distilled spirits combined rose from P36.29 billion in the first five months of 2014.

Collections from cigarettes grew the fastest, at 18.5 percent, to P25.34 billion as of end-May from P21.38 billion a year ago.

Excise taxes collected from fermented liquor increased by 15.8 percent to P11.49 billion from P9.92 billion last year.

But the January-to-May excise tax take from distilled spirits slightly slid by 1.3 percent to P4.93 billion, compared with P4.99 billion during the first five months of 2014.

The higher total collections were mainly a result of Republic Act No. 10351 or the Sin Tax Reform Law, coupled with the implementation of the Internal Revenue Stamps Integrated System or Irsis on tobacco early this year. The tax stamp system would also cover alcohol products before this year ends, Henares had said.

Under RA 10351, cigarette packs that cost below P11.50 are to be taxed P21 this year, up from P17 last year, while those priced P11.50 and above are slapped P28, slightly up from P27 in 2014.

Fermented liquor that cost less than P50.60 a liter are now taxed an additional P19 (from P17 last year), while those priced above P50.60 are slapped P22 (from P21).

Distilled spirits, meanwhile, are levied P20 plus 20 percent of the net retail price per proof, from P20 plus 15 percent last year.

Amid higher tax rates and prices, the volume of removals of both cigarettes and distilled spirits decreased during the first five months.

For cigarettes, the volume of products moved out of warehouses declined by 2.4 percent to 1.08 billion packs from 1.11 billion a year ago. In the case of distilled spirits, the volume of removals dropped by 12.4 percent to 145.53 million proof liters from 166.18 million proof liters last year.

As for fermented liquor, the volume of removals inched up by 2.8 percent to 581.79 million liters in end-May from 566.21 million liters during the same five-month period of 2014.
In 2013, or the first year of implementation of the sin tax reform, the total incremental revenue from tobacco and alcohol products hit P51.17 billion, but revenues slightly went down to P50.18 billion last year.

For 2015, the BIR targets to collect P1.67 trillion in taxes, of which P140.4 billion should come from excise taxes levied on alcohol, minerals, motor vehicles, petroleum and tobacco.