Government exceeds tax collection target on oil, tobacco

MANILA, Philippines — Petroleum and tobacco excise tax collections under the Tax Reform for Acceleration and Inclusion (TRAIN) Act rose above target in the first half mainly due to better compliance from industry stakeholders, according to the Department of Finance (DOF).

Based on DOF data, oil excise tax collections as a result of the TRAIN’s implementation reached P54.4 billion from January to June, 6.8 percent above the target of P50.9 billion.

“Petroleum excise tax is above target by P3.4 billion, due to higher-than-programmed volume of imports, and better compliance in anticipation of fuel marking program rollout,” the DOF said.

Meanwhile, DOF data also showed that tobacco excise tax collections under TRAIN amounted to P8.1 billion, 32.8 percent higher than the P6.1 billion goal.

“Tobacco excise tax is above target by P2.1 billion due to better compliance as the government continued to crack down illicit tobacco trade,” the DOF said.

Under Republic Act 10963 or the TRAIN Law, excise tax on oil was increased by P2.50 per liter effective Jan. 1, 2018 and by another P2 per liter in Jan. 1 this year. This will continue to rise by another P1.50 per liter by 2020.

The law also increased the excise tax on tobacco products to P35 per pack effective July last year.

According to the DOF, oil excise tax and tobacco excise tax were among the main drivers for the higher tax collections under TRAIN in the first half of the year.

The net gain from TRAIN during the period rose 65 percent to P55.6 billion from the P33.7 billion recorded in the same period in 2018. This was also 6.8 percent above the P52.1 billion target.