The Bureau of Internal Revenue (BIR), the government’s main tax agency, blamed the rampant illicit cigarette trade in the country for the lower-than-expected collection of sin taxes. During the Global Anti-Illicit Trade Summit on Thursday, May 18, BIR Commissioner Romeo D. Lumagui Jr. said that the illicit trade of tobacco products created a collection headache for the tax bureau. “For now, it’s really tobacco,” Lumagui said when asked which specific goods are causing the BIR the most headache. Lumagui had estimated that the government was losing P50 billion to P100 billion in tax revenues from the illicit tobacco trade. “I mentioned earlier, the revenue losses from tobacco are huge, and also that's one of the main reasons why we are not attaining our collection target for excise taxes,” he added. Lumagui said that the BIR was already 20 percent short of the excise tax collection goal in the first four months of the year. "It's really a huge problem, [and] we’re very serious in our efforts in going after illicit traders with respect to tobacco,” the BIR chief said. In 2022, the government’s sin tax revenues deteriorated after levies collected from alcohol and tobacco products fell short of hitting the target. Based on the BIR document submitted to the Department of Finance, the bureau collected P261.64 billion in excise tax from “sin products” from January to December, down two percent compared with P266.61 billion in 2021. The full-year sin tax revenue was also below 16 percent against the P313.2 billion goal for 2022. According to the BIR, the contraction was due to a weaker tax haul from cigarettes. Tobacco manufacturers paid P160.42 billion in excise taxes in 2022, down nine percent from P176.48 billion in the previous year. Moreover, cigarette excise tax collection failed to hit the P209.6 billion target for the year by 23 percent. The BIR also missed excise tax collection target for alcoholic beverages, but managed to register a year-on-year growth. Alcohol sin tax revenues hit P101.22 billion, up 12 percent compared with P90.13 billion a year ago. However, alcohol excise collection was two percent short against the P103.6 billion goal for 2022. The weaker sin tax collection performance comes in the wake of the BIR’s renewed crackdown on illicit cigarette trade in the country.