Tobacco tax up to P27.8 B in 2010

MANILA, Philippines –  Tax collections from tobacco products rose to P27.83 billion during the last quarter of the year, despite an impending eight percent excise tax increase on “sin items,” according to an official of the Philippine Tobacco Institute (PTI).

PTI president Rodolfo Salanga said contrary to a claim by the Department of Finance (DOF) that it expected excise tax collection from tobacco to amount only to P25.8 billion in 2010, revenues from the product increased.

Salanga said while Finance Undersecretary Gil Beltran continued to come up with lower figures on the excise tax collections on tobacco, “the opposite thing happened.”

Beltran was recently quoted as saying that “the DOF expects collection from tobacco products to dip to P22.5 billion in 2011 despite an eight percent excise tax increase on alcohol and tobacco products,” which took effect on Jan. 1, 2011.

But based on the Bureau of Internal Revenue data as of November 2010, total excise tax collections from the products increased by P2 billion.

“The fact that collection from tobacco products has continuously exceeded government targets in 2010 clearly shows that the current structure works,” Salanga said.