‘Sin tax’ collection breaches P100-B mark
THE EXCISE tax take from so-called “sin” products exceeded the P100-billion mark in end-October, with the Bureau of Internal Revenue (BIR) expecting collections to reach a record high by yearend.
The latest BIR data released by the Department of Finance (DOF) showed that excise tax collections from tobacco and alcohol products during the first 10 months totaled P105.5 billion, up 22 percent from P86.5 billion in the same period last year. The DOF said the actual end-October collection was also a fifth above the 10-month target.
The BIR collected P72.2 billion from cigarettes from January to October, 27.5-percent higher than the P56.7 billion a year ago.
The tax take from fermented liquors grew by almost 14 percent to P22.6 billion from P19.8 billion last year.
End-October collections from distilled spirits and compounded liquors, meanwhile, rose by 7.2 percent to P10.7 billion from last year’s P9.9 billion.
In the month of October alone, the excise tax collected from “sin” products jumped by 79.8 percent to P14.5 billion from P8.1 billion a year ago.
At the start of the fourth quarter, the take from cigarettes amounted to P10.9 billion; P2.3 billion from fermented liquors, and P1.3 billion from distilled spirits and compounded liquors.
As of end-October, incremental revenues from “sin” tax reform reached P48.1 billion—of which P35.4 billion came from tobacco products while P12.7 billion was contributed by alcoholic drinks—to surpass by 23 percent the P39.1-billion goal for the period.
In 2013, or the first year of implementation of Republic Act (RA) No. 10351 or the Sin Tax Reform Law, the total incremental revenues from tobacco and alcohol products reached P51.2 billion, 51-percent higher than the target.
Last year, incremental revenues dropped to P50.2 billion, an amount still 17-percent above the 2014 goal. In end-October, the incremental revenues resulting from the implementation of RA 10351 since 2013 stood at P149.5 billion.
Total excise taxes from sin products hit P114 billion last year.
But despite higher tax rates and prices, the volume of removals of both cigarettes and fermented liquor increased during the first 10 months, the DOF said.
For cigarettes, the volume of products moved out of warehouses rose by 6.6 percent year-on-year to 3.2 billion packs at end-October. As for fermented liquors, the volume of removals inched up by 1.2 percent to 1.1 billion liters.
In the case of distilled spirits, the volume of removals as of end-October dropped by 5 percent year-on-year to 315 million proof liters.
The excise taxes being collected from sin products continue to grow mainly due to the implementation of increased rates under 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 plus 20 percent of the net retail price per proof, from just P20 plus 15 percent last year.
Sin tax reform restructured the excise tax rates slapped on tobacco and alcohol, such that the resulting higher prices would discourage vice while also collecting more revenues to be poured into healthcare.
Also, the BIR this year 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.
This year, the BIR targets to collect P1.67 trillion in taxes, of which P140.4 billion should come from excise taxes slapped on alcohol, minerals, motor vehicles, petroleum and tobacco.
