Business Skinning Left, pagematch: , sectionmatch: 1

Business ( Leaderboard Top ), pagematch: , sectionmatch: 1

Sin tax collection up 40%

MANILA, Philippines - Excise tax collections from tobacco and alcoholic beverages grew 40 percent in the nine months through September this year, reflecting the success of the sin tax reform measure that jacked up the taxes of the so-called sin products.

Based on a report from the Department of Finance,  collection of excise tax on cigarettes and alcohol reached P91.64 billion from January to September compared with P65.45 billion in the same period a year ago.

Bulk of the  amount or P64.96 billion was accounted for by excise tax payments by tobacco firms, representing an increase of 56.7 percent from the P24 billion collected in the first nine months of 2013.

The amount marked a 90 percent jump from the P34.16 billion target for the nine-month period.

Excise tax payments by manufacturers of alcohol products amounted to P26.68 billion, up 11 percent year-on-year.  The figure is 12.19 percent below the government’s goal of P30.39 billion.

Last year, excise tax collections jumped  81.2 percent to P100.9 billion with the incremental revenue under the sin tax reform amounting to  P51.1 billion.

Business ( Article MRec ), pagematch: 1, sectionmatch: 1

BIR commissioner Kim Henares attributed the overwhelming growth in excise tax collections to the implementation of the amended sin tax law which increased the tax on tobacco and alcohol.

Henares said higher-than-expected collections invalidate allegations that the government is losing substantial revenues through illicit trade as insinuated by the report prepared by the International Tax and Investment Center (ITIC) and Oxford Economics.

The report claimed that illicit tobacco consumption accounted for 18.1 percent of the 105.5 billion cigarettes sold locally.

In debunking the report, the BIR said the data used was incomplete and lacked proper attribution as to source.

As compared to the report, the BIR pointed out that cigarette removals/consumption of 107.2 billion sticks is 1.7 billion sticks more than the 105.5 billion sticks (inclusive of the alleged illicit 19.1 billion sticks) cited by Oxford Economics.

Henares, however, said the agency was not totally discounting the fact that illicit cigarette consumption exists as it has become a worldwide concern.

She  assured the public that the government remains true to its commitment to run after tax evaders.

“The Bureau, together with the Bureau of Customs, has been very consistent in its fight against smugglers of goods as this affect our revenues,” Henares said.

“We implemented various measures to counter illicit cigarette activities such as implementation of stamp tax on cigarettes. We have also acted on reports by sectors to address allegations of misdeclaration / underdeclaration, and we are strictly monitoring removals of cigarettes products to ensure that those that are sold in the market are properly taxed,” she added.

According to the Oxford Economics report, the Philippines has become one of the biggest markets for illegal cigarette trade among member countries of the Association of Southeast Asian Nations (Asean), with illicit consumption almost tripling in 2013.

Illicit tobacco consumption in the Philippines accounted for 34.5 percent of all untaxed cigarettes consumed in the 14 countries studied, the second highest after Vietnam which took up a 39 percent share.

ITIC president Daniel A. Witt said the Philippines now has the fastest growing black market to the extent that one out of five cigarettes sold in the country is illicit.



Business ( Article MRec ), pagematch: 1, sectionmatch: 1
  • Follow Us:
Business Skinning Right, pagematch: , sectionmatch: 1