By Chino S. Leyco
Excise tax payments of cigarette manufacturers jumped last year, accounting for more than half of the Bureau of Internal Revenue’s (BIR) total sin tax collections, data from the Department of Finance (DOF) revealed.
Based on the DOF data released to reporters, the national government has collected ₱147.5 billion in sin taxes from cigarette products in 2019, higher by eight percent compared with ₱136.5 billion in the previous year.
The full-year excise taxes paid by cigarette-makers accounted for 54.77 percent of the BIR’s ₱269.1 billion collections from the so-called “sin” products and equivalent to 6.76 percent of the bureau’s P2.18 trillion total generated revenues in 2019.
The DOF data showed that the BIR’s sin tax revenues from alcoholic beverages accounted for 29.61 percent, or ₱79.7 billion, while sugar sweetened beverages shared the remaining ₱15.6 percent, or ₱42 billion.
In 2019, alcohol and sugar sin tax collections of the BIR also improved compared with ₱71.1 billion and ₱38 billion a year before, respectively. Earlier, the DOF said that government revenues from sin products, including sweetened beverages, almost doubled between 2015 and 2019 from ₱143 billion to ₱269.1 billion.
Finance Secretary Carlos G. Dominguez III explained the accelerated sin tax collections was because the Duterte administration “is the first government to have pushed more than one ‘sin’ tax hike bill in the Congress during its term.”
Revenues from sin taxes, particularly cigarettes, is expected by the DOF to further rise to P332.2 billion this year following the introduction of new levies on heated tobacco and vapor products as well as the further increases in taxes on alcohol and tobacco.
Based on the conservative DOF estimates, the government is poised to raise about P480 billion in sin taxes by 2024.
The DOF is also estimating that revenues from heated tobacco and vapor products to reach P14.9 billion this year and P125.8 billion by 2024.
Last January, President Rodrigo R. Duterte signed into law Republic Act No. 11467, which further increased excise taxes on alcohol, heated tobacco and vapor products, and is expected to raise an initial P22.2 billion this year.
Over a five-year period from 2020 to 2024, the DOF estimated that revenues totaling P137.2 billion from the newly enacted law.