MANILA, Philippines — The government’s excise tax collections continued to decline in May as a result of movement restrictions implemented amid the outbreak of coronavirus disease 2019 (COVID-19), the Department of Finance (DOF) said.
During the online Sulong Pilipinas Forum, Finance Secretary Carlos Dominguez said the Bureau of Internal Revenue’s (BIR) sin tax collections from alcohol and tobacco products last May dropped by 43 percent to P11.91 billion from P20.87 billion in 2019.
“That, again, is the result of the lockdown,” Dominguez said.
However, it could be noted that the year-on-year decline in excise tax collections last May slowed down from the 99.1 percent contraction last April.
From January to May 2020, sin tax collections from these product categories decreased by 39 percent to P63.1 billion from P102.71 billion in the same period last year.
Earlier, Finance Undersecretary and chief economist Gil Beltran said the decline in excise tax collections could be attributed to the implementation of strict quarantine protocols in different parts of the country.
He said the imposition of liquor bans by various local government units and the overall decline in the demand for sin products amid the COVID-19 crisis also affected collections.
“The lockdown did not enable the manufacturers to get their workers to work. And second, during the lockdown, you cannot sell cigarettes. They were prohibited from transporting those products during the lockdown,” Beltran said.
“Mainly the lockdown was imposed on non-essential items, and cigarettes and alcohol are non-essential,” he added.
As a result of the enhanced community quarantine, Beltran said the Development Budget Coordination Committee (DBCC) revised downwards the projected incremental revenues from sin products under Republic Act 11346 and RA 11467.
RA 11346, which was passed in July last year, increased excise taxes on tobacco products and introduced a new tax on e-cigarettes.RA 11467 was signed last January, which yet again increased the taxes on alcoholic beverages and e-cigarette devices.
He said additional revenues from these tax measures are expected to reach P13.2 billion this year, down from the previous estimate of P37.1 billion.
From 2020 to 2022, the newly passed laws are seen to add P73.1 billion to the state coffers, also down from the initial estimate of P137.3 billion.
According to data from the Bureau of the Treasury, the national government’s revenues declined by 39.17 percent to P187.8 billion in April from P308.7 billion last year.
Year-to-date, revenues as of April inched down by 3.36 percent to P963 billion from P996.4 billion in the same period a year ago.