‘Sin’ tax collections top 9-month target at P155.3 B
Revenues from the so-called “sin” products continued to surge in the first nine months of the year, surpassing government expectations amid higher levies imposed on cigarettes and alcohol, the Department of Finance (DOF) said.
Finance Undersecretary Antonette C. Tionko said that total sin tax collections amounted to 1155.36 billion in January to September this year, higher by 15 percent against the 1135 billion target for the period.
Tionko said excise taxes from tobacco exceeded the 196 billion target in the first three-quarters by 11 percent to 1 9.36 billion.
In September alone, tobacco contributed to 18.89 billion to the Bureau of Internal Revenues’ collections, but it lower by 57 percent year-on-year.
Tionko explained that decline in cigarette excise taxes during the month was due to the non-recurring revenues from the settlement of Mighty Corp.’s liabilities with the government.
Last year, the local cigarette manufacturer paid 140-billion in settlement relating to its alleged tax evasion and the use of fake tax stamps for its products.
For alcoholic beverages, sin taxes amounted to 149.36 billion at end-September, higher by 24 percent compared with the 139 billion goal, which is also an increase of 15 percent year-on-year from 142 billion.
In September alone, the alcohol excise revenues reached 15.60 billion, above by 23 percent against the target for the month and 13 percent higher than last year’s collections.
For 2018, the DOF expects sin taxes to amount to 1203.59 billion, up by nine percent from 1186.96 billion in the previous year. Of that target, 1143.14 billion is seen to be generated by cigarettes while the remaining 160.45 billion is from alcohol.
The BIR is now tasked to raise 148.23 billion from cigarettes and alcohol in the final three-months of the year to hit this year’s goal.
For next year, the inter-agency Development Budget Coordination Committee (DBCC) set its sin tax revenues at 1224.33 billion.
Under Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion (TRAIN) law, lowered personal income, estate and donors tax rates, but removed some value-added tax exemptions.
The first tax reform law also hiked excise tax rates for automobiles, minerals, tobacco and fuel; as well as imposed new excise levies on sugar-sweetened beverages and cosmetic procedures.