End-Sept. ‘sin’ tax take grew 16% to P91B

THE EXCISE taxes collected from so-called “sin” products grew by 16.1 percent to almost P91 billion at the end of the first nine months, the latest Bureau of Internal Revenue (BIR) data showed.

BIR Commissioner Kim S. Jacinto-Henares told the Inquirer the end-September take exceeded the P78.4 billion in excise tax collections from tobacco and alcohol products during the same nine-month period last year.

From cigarettes, the BIR collected P61.4 billion at end-September, up 18.4 percent from P51.8 billion a year ago.

The tax take from fermented liquors rose by 13.8 percent to P20.3 billion from P17.8 billion last year.

End-September collections from distilled spirits, meanwhile, increased by 7.4 percent to P9.4 billion from last year’s P8.7 billion.

The excise taxes being collected from sin products continued to grow, mainly due to the implementation of increased rates under Republic Act (RA) No. 10351 or the Sin Tax Reform Law.

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

Fermented liquor that cost less than P50.60 per liter are levied P19 (from P17 last year), while those priced P50.60 and above are taxed P22 (from P21 in 2014).

This year, distilled spirits are levied an additional P20 and another 20 percent of the net retail price per proof. Last year, the rate was at P20 plus 15 percent.

The law restructured the excise tax rates slapped on tobacco and alcohol such that the resulting higher prices would discourage vice while also collecting more revenues for use in healthcare.

This year, the BIR tightened its monitoring of cigarette companies’ tax payments through the Internal Revenue Stamps Integrated System.

The tax stamp system would also cover alcoholic drinks by early next year, Henares said.

The BIR regulation provides all cigarette packs should have tax stamps by April 1, 2015. Distributors face penalties if they continue to sell cigarette packs without tax stamps.

In 2013, or the first year of implementation of the Sin Tax Reform Law, the total incremental revenues from tobacco and alcohol products reached P51.2 billion.

Last year, incremental revenues dropped to P50.2 billion.

According to the Department of Finance (DOF), sin tax reform “fixed long-standing structural weaknesses” in the taxation of tobacco and alcohol.

During the first two years of its implementation, it generated more than P104 billion poured into universal healthcare programs, DOF data showed.

This year, the BIR targets to collect P1.674 trillion in taxes, of which P140.4 billion should come from excise taxes slapped on alcohol, minerals, motor vehicles, etc.