Manufacturers scrambled to put graphic health warnings on cigarette packs before March, resulting in lower volumes released in the market and, consequently, lower excise tax collections on “sin” products that month, Bureau of Internal Revenue (BIR) data showed.
In March, the BIR collected P8.1 billion in excise taxes from tobacco products, fermented and compounded liquor, and distilled spirits, down 1.7 percent from the P8.2-billion take a year ago. It was also 5.3 percent below the P8.5-billion target for the month.
BIR data showed that collections from tobacco dropped 16.1 percent year-on-year to P4 billion, reflecting a 25.8-percent decline in removals of cigarette packs from warehouses that month.
In March, 148.6 million cigarette packs were delivered, down from 200.3 million a year ago.
The BIR blamed the lower volume and excise taxes collected from tobacco mainly to the implementation of the graphic health warning law starting March, as manufacturers and importers had to ensure that cigarette packs bore the warnings.
BIR data also showed declines in withdrawals as well as collections from distilled spirits, compounded liquors and wines, whose volume dropped 12.8 percent year-on-year to 27.4 million proof liters, bringing down collections by 9.1 percent to about P970 million.
Despite the drop in March, excise tax collections in the first quarter hit P26.6 billion, exceeding by 22.8 percent the P21.7-billion take a year ago. It was also 7.6 percent higher than the P24.7-billion goal for the first three months.
The first-quarter take from tobacco products jumped 23.1 percent year-on-year to P14.9 billion; from fermented liquors, up 30.7 percent to P8.7 billion; and from distilled spirits and compounded liquors, up 3.8 percent to P3 billion.
“Now augmented with the implementation of the Graphic Health Warning Law, our landmark sin tax reform continues to deliver positive health outcomes for the Filipino people,” Finance Secretary Cesar V. Purisima said in a statement.