Sin tax collection posts minimal increase in 8 months
Tax collections from sin products increased slightly in the first eight months of the year amid contraction in revenue haul from tobacco products, the Bureau of Internal Revenue (BIR) reported.
Based on the BIR report submitted to the Senate, total excise tax collections from cigarettes and alcohol reached P243.49 billion in January to August, a minimal 2.2 percent improvement compared with P238.01 billion in the same period last year.
Based on the BIR data, the slower tax collection growth was due to the contraction in revenue haul from tobacco products. Tax collection from alcoholic beverages managed to drive growth during the period.
At end-August, excise taxes paid by the tobacco manufacturers declined by five percent to P148.44 billion from P156.86 billion a year earlier.
The excise tax collections from cigarettes as of August accounted for 70.8 percent of the BIR’s P209.6 billion expected revenues for the year from the tobacco industry.
On the other hand, sin taxes from alcoholic beverage makers jumped 17 percent from P81.15 billion to P94.95 billion in the first eight-months of 2022, equivalent to 78.3 percent of the bureau’s collection target of P103.6 billion.
For 2023, the BIR is tasked to collect P359.81 billion in sin taxes, 15 percent higher compared with this year's target of P313.2 billion.
Earlier, Finance Secretary Benjamin E. Diokno said the Marcos administration will prioritize tax administration and digitization program to raise government revenues.
Diokno had also expressed hesitation in pushing other new tax measures, aside from the plastic and mining taxes, in the first year of the Marcos administration.
But despite this pronouncement, the House Ways and Means Committee chaired by Rep. Joey Salceda, and the Department of Health filed a bill seeking to impose higher excise taxes on sin products.
The House bill covers cigarettes, alcohol, sugar sweetened beverages, and novel tobacco products such as vapes.
If passed into law, House Bill No. 1810 will effectively increase excise taxes on “alcopops” or pre-mixed alcohol beverages by reclassifying them as “fermented liquors.”
Currently, alcopops are taxed lower than beer, despite their similar consumption pattern and attractiveness to the youth.