Sin tax collection to hit ₱332 B in 2020

Published February 21, 2020, 12:00 AM

by manilabulletin_admin


The government is confident it can raise sin taxes collection by more than 23 percent this year to ₱332.3 billion after covered products were expanded, according to Finance Undersecretary Karl Kendrick Chua.

Chua also noted that the revenue estimate from “sin” products is about 131.6 percent more from what was collected in 2015. And, by 2024, “sin” taxes could reach ₱480 billion. “This is a low-end projection,” he added.

These “sin” taxes will now include electronic cigarettes such as heated tobacco products (HTPs) and vapor (vaping), while the excise taxes on alcoholic drinks and cigarettes or tobaco products will be increased.

In 2019, the government collected ₱269.1 billion excise taxes, more than double 2018’s ₱143.5 billion after including sweetened beverages into the pot.

In a statement Friday, the Department of Finance (DOF) reiterated that the “sin” tax collections will fund the state-financed Universal Health Care (UHC) program which will start this year while the “higher sin taxes also aim to deter the consumption of unhealthy products to help lower healthcare costs and promote a healthy citizenry.”

“In 2015, the total revenue from ‘sin’ products was ₱143.5 billion. Last year, in 2019, the total was ₱269.1 billion or 87.5 percent more. Starting 2020, ‘sin’ taxes now include the collection of excise taxes on tobacco, alcohol, sweetened beverage and e-cigarette products,” said Chua in a DOF Executive Committee (Execom) report.

The new set of “sin” taxes is covered by Package 2 plus of the Comprehensive Tax Reform Program.

Republic Act No. 11346 or the Tobacco Tax Reform also increased excise taxes on tobacco products to ₱45 per pack starting this year and ₱5 per pack thereafter until the rate reaches ₱60 per pack in 2023.

Starting 2024, the tax rate will be increased by five percent each year.
This law also introduced a new tax on e-cigarettes such as HTPs and vapor products, said the DOF.

RA 11346, in the meantime, is estimated to add ₱14.9 billion this year and ₱125.8 billion by 2024 from cigarettes alone, according to Chua.

Last January 22, President Rodrigo Duterte signed into law RA 11467, which further increases excise taxes on alcohol, HTPs and vapor products, and is expected to raise an initial ₱22.2 billion this year, said the DOF.

From 2020 to 2024, an estimated ₱137.2 billion in new revenues could be collected because of this law, added the DOF.