End-September collection up on higher sin taxes

Excise taxes collected from “sin” products such as cigarettes and alcoholic drinks rose 9 percent year-on-year to P100.3 billion at end-September, boosted by higher tax rates implemented since the start of the year.

The latest Bureau of Internal Revenue (BIR) data showed that the sin tax take during the nine-month period increased from P91.9 billion last year amid a double-digit jump in collections from alcohol products.

Wine collections

From January to September, total excise taxes collected from alcohol climbed 18.3 percent to P42.2 billion from P35.7 billion a year ago.

Collections from wine jumped 109.3 percent year-on-year to P34.6 million, while those from distilled spirits and compounded liquors rose 10.6 percent to P11.2 billion.

From fermented liquors, nine-month excise taxes grew 21.3 percent year-on-year to P30.9 billion.

As of September, wines for distribution straight from warehouses increased 101.3 percent year-on-year to 984,672 liters; distilled spirits/compounded liquors, up 7.8 percent to 309.8 million proof liters; and fermented liquors, up 10.5 percent to 1.3 billion liters, BIR data also showed.

Under Republic Act No. 10351 or the Sin Tax Reform Law, the excise tax slapped on alcoholic products since Jan. 1 this year rose to a unitary rate of P23 per liter. It was at P21 for products priced P50.60 or less per liter and P23 for those priced above P50.60 per liter last year.

Tobacco

In the case of tobacco products, they were levied a unitary rate of P30 per pack, following a two-tiered system last year whereby cigarettes priced P11.50 per pack were taxed P25 while those priced higher were slapped P29 per pack.

BIR data also showed that at end-September, distribution of cigarettes actually declined by 8.1 percent to 1.9 billion packs from last year’s 2.1 billion, as consumption decreased amid higher retail prices.

Due to the higher tax rate, however, collections from cigarettes during the period in review still inched up 3.1 percent to P58.1 billion from a year ago’s P56.3 billion.

Last month, Finance Secretary Carlos G. Dominguez III said additional excise taxes to be collected from Mighty products under its new owner would reach as much as P40 billion next year, higher than the previous estimate of P24 billion annually.

The government earlier filed three tax evasion cases worth nearly P38 billion against the homegrown manufacturer.

The government eventually decided to settle with Mighty, under which the Bulacan-based company had to sell P46.8 billion in assets to JTI.