“SIN” TAX collections more than doubled as of August with the implementation of a new law that raised excise taxes on alcohol and tobacco products.
Finance department data showed the Bureau of Internal Revenue’s (BIR) “sin” tax take at P56.3 billion as of end-August, 61.1% up from a year earlier.
Broken down, collections from tobacco products amounted to P35 billion, 77.7% higher, while, collections from alcohol products rose by 39.6% to P21.3 billion.
BIR Commissioner Kim S. Jacinto-Henares said the notable increase showed the “full” effect of the Sin Tax Reform Act of 2012, which took effect at the start of the year.
“This is in line with our expectation that the collections … should begin to normalize by the second half of the year…,” she added.
Initial “tepid” results, Ms. Jacinto-Henares explained, were attributable to manufacturers’ frontloading of stocks.
“We had anticipated a lag in collections since we know that manufacturers frontloaded their production of their stocks last year before the implementation of the new law,” she said.
“Now they’re running out of these frontloaded stocks, so they’re producing new stocks and paying these higher excise taxes.”
Frontloading is again expected given next year’s scheduled tax rate increase.
The new law sets two tiers both for tobacco products and fermented liquor, which will increase to settle at a single rate by 2017, and a combination of ad valorem and specific tax for distilled spirits.
The BIR aims to collect P85.86 billion in “sin” taxes this year — P51.654 billion from tobacco products and P34.206 billion from alcohol products.
In 2012, “sin” tax collections totaled P56.838 billion.
Source: Bettina Faye V. Roc, Business World, October 24, 2013
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