BIR sin tax collections contract last year
Published Apr 24, 2023 02:12 am
The government's sin tax revenues deteriorated last year after levies collected from alcohol and tobacco products fell short of target, data from the Bureau of Internal Revenue (BIR).
Based on the BIR document submitted to the Department of Finance, the government’s main tax agency collected P261.64 billion in excise tax from “sin products” in January to December, down two percent compared with P266.61 billion in 2021.
The full-year sin tax revenue was also below by 16 percent against the P313.2 billion goal for 2022.
According to the BIR, the contraction was due to 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.
Earlier, BIR Commissioner Romeo Lumagui Jr. estimated that the government was losing P50 billion to P100 billion in tax revenues from the illicit tobacco trade.
Sought for comment, Finance Secretary Benjamin E. Diokno said he will “review” the 2022 sin tax collection data released by the BIR.
For 2023, the BIR expects to collect P359.17 billion in sin taxes. Of that amount, P244.06 billion will come from tobacco, and P115.11 billion is from alcohol.
The BIR needs to improve its collection efficiency by 37 percent to meet this year’s target.
Currently, there are also bills in Congress seeking to declare cigarette smuggling as an act of economic sabotage.
Under the proposed measure, cigarette smuggling as economic sabotage carries stiffer and heftier penalties, including making the illicit trade non-bailable.