Four-month tax take from tobacco products drops by P6.6B

cigarette tobacco

MANILA, Philippines — Excise tax collections from tobacco products dropped by P6.6 billion during the first four months of the year, amid the continued smuggling of cigarettes and the increasing use of vape products in the country.

Venus Gaticales, chief of excise large taxpayers field operations division of the Bureau of Internal Revenue (BIR), on Tuesday said that collections had dropped to P46.69 billion as of April, attributing the decline to several factors including the illicit cigarette trade.

“Illicit trade deprives the Philippine government of much-needed tax revenue and cheats everyone: society, consumers, and legitimate businesses,” Gaticales said in a statement during a forum at the AIM Conference Center in Makati.

“Without a steady flow of excise taxes from tobacco, illicit trade also hampers the government’s ability to sustain funding for its various social welfare programs,” she added.

According to Gaticales, half of the government’s tobacco excise tax collection is allocated or used exclusively for the state’s universal healthcare program.

READ: Cigarette smuggling siphons off taxes that fund health care – solon

“So, the decrease of the collection, as far as the tobacco excise tax is concerned, our health care would be affected,” she said.

Citing a study done by the University of Asia and the Pacific, she said that foregone revenues will soar to P33.7 billion this year following the loss of about P25.5 billion in 2023.

Aside from the smuggling of tobacco products, Gaticales also attributed the decline in excise tax collections to the rise in the use of vape products.

Gaticales estimates that the yearly excise tax collections on vape do not exceed a billion pesos, making it pale in comparison to the tens of billions collected annually from tobacco products. INQ