Tobacco excise tax collection rises 8% to P147 billion in 2019

MANILA, Philippines — Excise taxes collected from cigarette products rose to P147.4 billion in 2019, making up more than half of the Bureau of Internal Revenue’s (BIR) “sin tax” collections during the period, the Department of Finance (DOF) said.

According to data from the DOF, excise tax collection from tobacco products last year rose almost eight percent to P147.4 billion from P136.5 billion the previous year.

This accounted for 54.78 percent of the BIR’s total excise tax take last year, which amounted to P269.1 billion.

Meanwhile, DOF data also showed that excise tax collection from alcoholic beverages reached P79.7 billion in 2019, 12.1 percent higher than the P71.1 billion recorded the previous year. This also accounted for 29.6 percent of total excise tax collections.

Sugar-sweetened beverages also contributed 15.6 percent of total sin tax revenues, reaching P42 billion in 2019 or 10.53 percent higher from P38 billion in 2018.

Earlier, DOF reported that the government’s excise tax collection in 2019 amounted to P269.1 billion, which is almost double the P143.5 billion recorded in 2015.

This is expected to increase by 23.49 percent this year to P332.3 billion.

The DOF said the projected increase would be driven by higher rates on tobacco and alcohol products as well as the introduction of new taxes on electronic cigarette devices, such as heated tobacco and vaping products.

By 2024, DOF estimates that the government would be able to collect about P480 billion in excise taxes.

In July last year, President Duterte signed Republic Act 11346 which increased excise taxes on tobacco products and introduced a new tax on e-cigarettes. The DOF said RA 11346 is projected to raise P14.9 billion in additional revenues this 2020.

Duterte then signed RA 11467 last January which yet again increased the taxes on alcoholic beverages and e-cigarette devices. The DOF expects to generate P17.1 billion in additional revenues from this measure this year.

The DOF said 60 percent of proceeds from RA 11467 would be earmarked for the Universal Health Care program, while 20 percent would be spent for medical assistance and health facilities.

The remaining 20 percent will go to programs that will help the government fulfill its commitments under the United Nations (UN) Sustainable Development Goals.