Government revenues surged in October on the back of sin tax reforms, with collections from tobacco and alcohol products exceeding targets, the Finance department said.
October saw a 79.8-percent increase to P14.55 billion, the department reported. That pushed up the year-to-date tally to P105.53 billion—22 percent higher than the yearago level and topping the Bureau of Internal Revenue’s (BIR) P87.8-billion target.
The Finance department said that as of October, incremental revenues attributed the sin tax reform totaled P48.1 billion. Tobacco products were said to have accounted for P35.4 billion while alcohol added P12.7 billion, allowing the BIR to exceed a P39.1-billion goal.
“This builds on the gains earned from the first two years of implementation, when sin taxes raked in P51.2 billion for 2013 and P50.2 billion and 2014, exceeding targets by 51 percent and 17 percent, respectively,” the department said.
To date, incremental revenues have amounted to P149.5 billion, it added.
Republic Act 10351, signed by President Benigno Aquino 3rd in 2012, restructured the excise taxes on alcohol and tobacco products, raising the rates starting 2013 and every year therafter.
The government has touted the law’s impact on revenues and a corresponding improvement in Filipinos’ health as price hikes reduce consumption, but industries, tobacco firms in particular, have complained that higher taxes have driven illicit trade.
Breaking down October’s P14.55-billion sin tax take, the Finance department said alcohol products accounted for P3.7 billion, 12 percent higher from last year, while tobacco products contributed P10.9 billion, surging by 126 percent.
For the 10-month period, excise tax collections from tobacco products amounted to P72.24 billion, 27.5 percent higher compared to January-October 2014. For fermented liquor, the take reached P22.62 billion, an increase of 13.7 percent, while collections from distilled spirits rose by 7.2 percent to P10.67 billion.
The volume of removals for cigarette packs, meanwhile, increased by 6.55 percent to about 3.2 billion packs, the Finance department said.
Fermented liquors saw a 1.16-percent increase to 1.1 billion liters, while distilled spirits contracted by 5.02 percent to 315 million proof liters.
Slim volume growth figures, the department said, reflect continued depression of consumption in keeping with the sin tax reform’s health-oriented goals.
The volume of removals for cigarette packs, it noted, noticeably deflated to 3.2 billion packs as of October compared to 5.8 billion packs for 2012 ahead of the law’s implementation.
“The significant increase is largely attributed to the frontloading of removals by cigarette manufacturers because of the impending increase in excise tax rates on January 1, 2016,” Internal Revenue Commissioner Kim Jacinto Henares said.
“This being so, we will continue strengthening our tax administration and enforcement capacities to build on the gains we’ve earned with Sin Tax Reform. We vow to consistently uphold the rule of law in ensuring sin products pay their fair share in building ourselves a healthier, more prosperous nation,” she added.