Excise tax collection from ‘sin’ products surges 15.8% in Q1

THE national government collected P67.3 billion in excise taxes from “sin” products in the first quarter of the year, surging by 15.8 percent from the same period a year ago.

Sin tax haul by the Bureau of Internal Revenue and the Bureau of Customs from January to March this year posted a double-digit growth from P58.1 billion in the first quarter of last year, preliminary data obtained by the Businessmirror showed.

Finance Assistant Secretary Maria Teresa S. Habitan said it is likely that the sin-tax collection was higher during the period due to the rise in volume of removals particularly in tobacco and alcohol products as lockdown restrictions were eased and a ban on sale of alcohol lifted.

“Wala ng alcohol ban, for one; may easing ng restrictions compared to last year,” Habitan told the Businessmirror.

Contributing to higher sin-tax collection are the further increases in excise tax rates for tobacco products, e-cigarettes and alcohol under Republic Act 11346 and RA 11467, Habitan said.

More than half of the government’s sin tax haul for the first quarter of the year came from tobacco products amounting to P37.1 billion, a 20.5-percent jump from P30.8 billion in the same period last year.

This was followed by alcohol products, which yielded the government P21.5 billion in excise taxes, soaring by 17.8 percent year-on-year from P18.2 billion.

Collections from sweetened beverages, however, dipped by 4.8 percent to P8.6 billion in the first quarter of 2021 from last year’s P9.1 billion.

Meanwhile, the government’s excise tax take on e-cigarettes reached P76 million, more than triple the amount collected in the same period a year ago at P24 million.

Substantial portion of total sin taxes collected go to the implementation of the universal health care program.

For this year, Habitan said they remain hopeful that the government will attain its P297.8 billion full-year collection target despite the re-imposition of stricter lockdown measures especially in the National Capital Region Plus earlier this year to address the surge in Covid-19 cases.

In 2020, total sin tax collection dropped by 3.27 percent to P260.58 billion from P269.4 billion in 2019 amid economic recession due to Covid-19 pandemic, based on preliminary data earlier obtained by Businessmirror.

Despite this, the government managed to exceed last year its downgraded goal of P235.3 billion.

Under RA 11346 that was signed into law on July 2019, excise taxes on tobacco products were further increased to P50 per pack this year from P45 per pack a year ago.

Excise taxes on alcohol, heated tobacco products and vapor products were also further raised under RA 11467.