‘Sin’ tax collections seen to rise this year

The Bureau of Internal Revenue (BIR) expects the excise tax take from so-called “sin” products such as alcohol and tobacco to further increase this year to P150.4 billion partly on the back of plans to tighten monitoring of payments from distilled spirits.

The target for 2016 was equivalent to at least 6-percent growth from the record collections of P141.8 billion last year, which not only grew by a fourth year-on-year but also exceeded the P119.1-billion goal for 2015.

This year, the BIR targets to collect excise taxes worth P104.4 billion from tobacco and almost P46 billion from alcohol. Last year, the BIR collected P100 billion in excise taxes from cigarettes, P28.3 billion from fermented liquor, P13.5 billion from distilled spirits and compounded liquor and P50 million from wines.

The latest BIR data showed that the higher excise taxes slapped on alcohol and tobacco at the start of the year increased the tax take by 37.4 percent year-on-year to P18.5 billion as of end-February, surpassing the two-month target of P16.2 billion.

Under Republic Act 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 a pack saw their tax rise by P1 to P29, bringing retail prices higher.

For fermented liquor, those with a net retail price a 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.

Also, excise tax collections on tobacco have been rising after the BIR tightened its monitoring of cigarette companies’ tax payments through the Internal Revenue Stamps Integrated System (Irsis).

As of March 20, 99.6 percent of cigarette packs in retail outlets nationwide complied with Irsis on tobacco products, which the BIR has been implementing since late 2014, the latest data from the Department of Finance and the World Bank showed.