8-month excise tax take declines 13.5% to ₧164.9B on lockdowns

EXCISE taxes collected by the national government from “sin” products from January to August are still down by 13.5 percent year-on-year to P164.9 billion as economic activities were halted during the enhanced community quarantine (ECQ).

Latest preliminary data obtained by the Businessmirror showed that the sin tax collection of Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC) for the eight-month period this year fell short of its P190.5- billion take last year.

This, despite BIR’S and BOC’S sin tax haul for the month of August reaching P26.9 billion, 19.2 percent above its P22.6-billion collection in the same period last year.

Finance Assistant Secretary Maria Teresa Habitan told the Businessmirror the January to August figure still reflected the impact of the lockdown from March to May.

“Down pa rin year- on-year because of ECQ from March until May when most of the factories manufacturing sin products were closed or, in the case of alcohol products, shifted to manufacturing rubbing alcohol instead of alcoholic drinks,” Habitan said.

N onetheless, Habitan expressed optimism that the government’s main collecting agencies can hit the P235.3 billion revised full-year target for sin tax collection this year.

The new target approved by the Cabinet-level Development Budget Coordination Committee (DBCC) is 12.6 percent below the government’s 2019 sin tax haul of P269.1 billion.

“It’s good that collections are increasing, and hopefully, no more severe lockdowns are imposed hereinafter,” she said.

Of all the sin products, collections from sweetened beverages incurred the biggest decline in the eight-month period, reaching only P24.7 billion, 14.1 percent down from last year’s P28.8 billion.

Meanwhile, excise taxes from tobacco for the same period also slid by 14 percent year- on-year to P95.7 billion from P111.3 billion in 2019.

Tax from alcohol products hit P44.4 billion, falling by 12 percent from P50.5 billion in the same period a year ago.

For August alone, the bulk of the government’s sin tax take came from tobacco at P18 billion, followed by alcohol at P6.2 billion, and sweetened beverages at P2.7 billion.

Government’s collections from tobacco and alcohol for the month posted year- on-year increases of 35.9 percent and 2.5 percent, respectively. In August last year, BIR and BOC took P13.3 billion in revenues from excise taxes on tobacco and P6 billion from excise taxes on alcohol.

Among the sin products, it was only on sweetened beverages that the government recorded a yearon-year decline to P2.7 billion in August this year from P3.2 billion in the same month last year.

Due to base effect, the government expects sin tax collection to rebound next year by 54.6 percent to P363.6 billion, and to further increase by 23.5 percent to P449.2 billion in 2022.

In January 2020, President Duterte signed into law Republic Act 11467, hiking the excise taxes on alcohol and imposing new duties on heated tobacco and vapor products, in a bid to raise more revenues for the implementation of the Universal Health Care law.