Excise tax take raised as BIR runs after Mighty

While the government firms up a tax evasion case against homegrown cigarette manufacturer Mighty Corp. for allegedly using fake tax stamps, the Bureau of Internal Revenue’s (BIR) collection from excise taxes this year is expected to further rise to P185.029 billion.

BIR data showed that of the agency’s P1.829-trillion tax collection goal for 2016, the bulk or P1.057 trillion must come from taxes on net income and profits.

The target take from value-added tax is P364.431 billion; P73.346 billion from percentage taxes; and P101.028 billion from other taxes.

Collections from non-BIR operations, meanwhile, were expected to reach a total of P48.14 billion.

In January, Internal Revenue Commissioner Caesar R. Dulay said that the proliferation of counterfeit cigarette tax stamps “definitely impacted” on the collection of excise taxes.

Preliminary BIR data showed that total excise tax collections last year rose to P163.5 billion from P158.3 billion in 2015.

Despite the increase in the total excise tax take, collections from tobacco products declined to P91.6 billion in 2016 from 2015’s P99.5 billion. This was despite higher rates implemented last year than in 2015 under Republic Act No. 10351 or the Sin Tax Reform Law.

BIR officials had blamed the lower excise tax collections from cigarettes last year to the impact of the graphic health warning on cigarette packs, lower removals or sales as a result of higher excise taxes, and the proliferation of fake stamps and smuggled imported products.

Last week, Finance Secretary Carlos G. Dominguez III said the government was still establishing the exact amount of Mighty’s tax liability, a process he admitted may take some time.

“We’ll see if we have a strong case. If we do, we’ll file the case,” the finance chief said.

As for a possible settlement with Mighty, Dominguez said “if there’s a reasonable offer, maybe” the government may consider, although the tax evasion charges against it would still push through.