‘20 SIN TAX DIPS TO P261B ON LOCKDOWNS, BANS

GOVERNMENT’S excise tax collections on “sin” products dipped to P260.58 billion in 2020 as Covid-19 induced lockdowns and the imposition of alcohol bans dampened consumer demand.

Based on preliminary data obtained by the Businessmirror, total sin taxes collected by the Bureau of Internal Revenue and Bureau of Customs went down by 3.27 percent last year from P269.4 billion in 2019.

Despite this, the government was able to exceed its 2020 revised sin tax collection goal of P235.3 billion that the Development Budget Coordination Committee (DBCC) adopted on July 28 last year.

Nonetheless, excise taxes collected from alcohol and sweetened beverages were both down yearon-year while the government managed to take more excise taxes last year from tobacco compared to 2019.

Finance Assistant Secretary Maria Teresa Habitan said the imposition of the lockdown amid the Covid-19 pandemic, coupled with an alcohol ban in most jurisdictions caused the decline in sin tax collections.

Tobacco draws big share

“Matindi lang ang smokers, kahit ECQ [enhanced community quarantine], naninigarilyo pa rin [The smokers are just more persistent, they continued to smoke even under an ECQ], though at a slower pace,” Habitan said in a message to Businessmirror.

Among the sin products, the government collected the most from tobacco last year at P148.45 billion. This was slightly higher by 0.58 percent from P147.6 billion in 2019.

Next to tobacco was alcohol, from which the government sourced P77.96 billion of its sin tax collections. However, this was down by 2.18 percent from P79.7 billion in the same period in 2019. Meanwhile, excise tax take on sweetened beverages last year suffered the biggest drop to P34.17 billion, a double-digit decline of 18.8 percent from P42.1 billion in 2019.

President Duterte signed into law in January 2020 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.

In December 2017, the President also signed into law the Tax Reform for Acceleration and Inclusion (TRAIN) Law, which also introduced excise tax on sweetened beverages and also hike tobacco excise tax, among others.