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By Chino S. Leyco, Reporter
THE proposed single-rate tax on
sin products will compensate for foregone revenues once the
government reduces the corporate income tax rate next year, the
Department of Finance said Wednesday.
Finance Secretary Margarito B.
Teves said a single tax rate on all alcohol and tobacco products
will make up for the 5-percent reduction in the corporate tax rate
from 35 percent at present.
Teves said the single rate on sin
products would be easier to administer and help improve
tax-collection efficiency.
A World Bank study showed the
government could raise an additional P86.5 billion by having uniform
rates on all kinds of cigarettes.
The reduction of the corporate
tax rate by 5 percent will lead to foregone revenues of P12 billion
a year.
The country has a complicated
four-tiered excise tax system for tobacco products, with no regular
adjustments for inflation resulting in a 640-percent tax
differential between low-priced and premium-priced brands.
Finance department data showed
the government eyes to collect P47.541 billion in taxes on tobacco
and alcoholic beverages this year, or P2.113 billion higher than the
P45.428 billion goal last year.
Of the total collection target
this year, the Bureau of Internal Revenue (BIR) aims to increase its
share to P46.846 billion, or P2.106 billion higher than the P44.74
billion programmed last year.
The Finance department set higher
targets on tobacco excise taxes at P29.027 billion this year. For
alcoholic beverage products, the BIR hopes to collect P17.819
billion.
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