Sin tax collections up 2.22% to P13.36 B in May

MANILA, Philippines – Excise tax collections from “sin” products rose 2.22 percent to P13.36 billion in May, faster than April’s 1.5 percent and a reversal of 16.12 percent dip in March, data from the Bureau of Internal Revenue (BIR) showed.

Broken down, cigarette revenues went down 4.25 percent to P9.21 billion, but were offset by a faster 20.14 percent uptick in liquor products to P4.14 billion.

Earlier, BIR said tobacco firms may have been adjusting to RA 10643, which took effect in March, and required cigarette packs to contain photographs of smoking health repercussions.

Jo-Ann Diosana, senior economist at think tank Action for Economic Reforms said sin taxes are still bound to go up.

“There is no doubt the reform is bringing in more much-needed revenues,” she said in an earlier phone interview.

Diosana was pertaining to RA 10351 enacted in 2012 that prescribed for yearly specific adjustments in tobacco and alcohol excise tax rates until this year.

By 2017, a unitary tax rate will be imposed in the products, down from the original four. The law is meant to deter smoking and excessive drinking to promote good health.

It allocates 80 percent of incremental revenues to universal health care program and 15 percent to tobacco farmer support.

For the first five months, excise collections hit P56.6 billion, 4.62 percent up from previous year’s P54.10 billion, figures showed.

Broken down, tobacco revenues amounted to P36.73 billion, while their liquor counterparts reached P19.88 billion.

Under the Duterte administration, Finance Secretary Carlos Dominguez said raising sin taxes is also being explored under a comprehensive tax reform program.

The measure will be part of revenue-generating measures aimed at offsetting expected decline in income tax collection with lower personal and corporate income levies.

The proposal is expected to be submitted for Congress approval by September.