Sin tax collections hit record high in October

MANILA, Philippines — Excise tax collections from tobacco and alcohol products hit a historic high in October, giving the government more funds for universal healthcare as envisioned in a reform enacted three years ago.

The collections rose even as the volume of cigarettes and liquor products present in the market posted "slim" increases year-on-year during the first 10 months, the Department of Finance (DOF) said over the weekend.

A total of P105.53 billion in "sin" taxes was collected from January to October, up 22.06 percent from last year's P86.46 billion. This was the highest monthly collections since records began in 1999.

Broken down, cigarette tax take rose 27.5 percent to P72.24 billion, while the combined revenues from distilled spirits and fermented liquors reached P33.29 billion, up 11.71 percent.

For October alone, collections surged by almost 80 percent to P14.55 billion, Bureau of Internal Revenue (BIR) figures showed.

"Healthy figures tell us that we increasingly have more means to invest in our people, especially on universal healthcare," BIR Commissioner Kim Jacinto-Henares said in a statement.

The double-digit revenue rise was realized despite smaller increases in volume of products in the market. The volume pertains to supplies that come out of factories and those imported into the country.

"Slim growth figures on volume reflect continued depression of consumption, in keeping with the reform's health-oriented goals," the DOF said.

As per BIR data, the volume of tobacco products increased 6.55 percent year-on-year to 3.17 billion packs sold. Those for fermented liquors inched up by a slower 1.16 percent to 1.15 billion liters.

Distilled spirits, meanwhile, recorded a drop of 5.02 percent to 314.98 million proof liters as of October.

Signed by President Aquino in 2012, Republic Act 10351 or the Sin Tax Law increased excise levies in tobacco and alcohol products in what the administration said is a health measure meant to deter smoking and excessive drinking.

Under the law, 85 percent of incremental revenues generated by the reform will go to the Department of Health budget. Of the amount, 80 percent was earmarked for the universal healthcare program.

The remaining 15 percent was allocated to support tobacco farmers who may be displaced by the reform.

The DOF said revenues are bound to increase further as the law approaches full implementation by 2017 when unitary tax rates are imposed on tobacco and liquor products.

"We will continue strengthening our tax administration and enforcement capacities to build on the gains we earned with sin tax reform," Henares said.