‘Sin tax’ take up

October 31, 2018
Cigarettes

Government's enhanced collection measures allowed for an increase in sin tax revenues within the first nine months of 2018, the Department of Finance (DOF) reported.

Finance Undersecretary Antonette Tionko said excise tax from alcoholic products rose 15.22 percent year-on-year to PHP49.356 billion. During the same period last year, revenue collection from these products amounted to only PHP42.838 billion.

This is also 24.347 percent higher than the PHP39.692 billion collection target for the nine-month period

For tobacco, the collections reached PHP106.89 billion, 11.36 percent higher than the PHP95.984 billion in end-September 2017 and 11.33 percent higher than the PHP96.009 billion target.

For September alone, the collections from alcohol went up 13.82 percent to PHP5.633 billion, which is also higher than the PHP4.561 billion target.

On the other hand, revenues from tobacco fell 57.71 percent to PHP8.885 billion compared to last year’s PHP21.008 billion. Compared to the program, tobacco excise tax collections last September is short of the PHP21.019 billion target.

Tionko attributed this to the one-time non-recurring collection, referring to revenues collected from Mighty Corporation in its settlement with government.

In September last year, the government collected PHP17.6 billion from the cigarette company. The payment represents a partial settlement of the PHP30 billion that it owes government, the official said.

Finance Secretary Carlos Dominguez III expressed satisfaction over the continued improvement in government’s tax collection drive.

“Our collections from dividends are really super,” he added.

Under the Tax Reform for Acceleration and Inclusion (TRAIN) law, excise tax on cigarette was hiked from PHP30 per pack to PHP32.5 in the first half of this year. Starting July this year the tax is further increased to PHP35 per pack.