‘Sin’ tax take up 37.4% to P18.5B in first 2 mo.

The implementation of higher excise taxes on so-called “sin” products at the start of the year boosted the government’s tax take from alcohol and tobacco by 37.4 percent to P18.5 billion in the first two months.

Bureau of Internal Revenue (BIR) data released yesterday showed that the total amount of excise taxes collected from tobacco, fermented liquor as well as compounded liquor and distilled spirits as of end-February exceeded both the actual collections of P13.4 billion a year ago and the two-month target of P16.2 billion.

Under Republic Act No. 10351 or the Sin Tax Reform Law, the excise tax for cigarette packs priced P11.50 or less climbed to P25 starting Jan. 1 this year from P21 last year, while brands priced higher than P11.50 per pack saw their tax rate rise by P1 to P29, bringing retail prices higher.

For fermented liquor, those with a net retail price per liter of P50.60 or less saw their excise tax increase to P21 from P19 last year, while the levy for those priced above P50.60 increased by P1 to P23.

During the first two months, collections from tobacco products jumped 48.9 percent year-on-year to P10.9 billion, also exceeding the P9.9-billion goal for the period.

The take from fermented liquor, meanwhile, climbed 29.5 percent year-on-year to P5.6 billion, above the P4.2-billion target.

The excise taxes collected from distilled spirits and compounded liquor at end-February grew 10.2 percent year-on-year to P2.1 billion, slightly higher than the target of P2.02 billion.

BIR data showed that despite higher retail prices, the volume of “sin” products withdrawn from factories increased in the first two months.

In the case of cigarettes, withdrawals reached 400.8 million packs, up by a third from 301.6 million packs a year ago.

As for fermented liquor, end-Feburary withdrawals hit 258.3 million liters, 19.2-percent higher than 216.8 million liters last year.

The volume withdrawals of distilled spirits, compounded liquor and wines, meanwhile, rose 6.2 percent to 58.7 million proof liters from 55.2 million proof liters during the first two months of 2015.

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.

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

The tax stamp system would also cover alcoholic drinks within this year, Revenue Commissioner Kim S. Jacinto-Henares earlier said.

Henares said the BIR and industry players were still fine-tuning the process of affixing tax stamps on distilled spirits and wines so that production at factories would not be stalled by the stamping process.