Higher target eyed for BIR

MANILA, Philippines - The Bureau of Internal Revenue (BIR) may be assigned a higher collection goal once the sin tax measure is enacted into law, its top official said yesterday.

BIR Commissioner Kim Henares said the agency’s 2012 target of P1.066 trillion is likely to be adjusted upward if the sin tax bill becomes a law this year.

“Every time there’s a new revenue measure, the goal of BIR gets increased also,” Henares said.

The BIR chief welcomed the approval of the sin tax measure at the House Ways and Means committee level.

She said it is an initial step toward the government’s move to restructure the country’s excise tax regime.

“We’re glad that it has passed the committee level. That is really the first step in reforming the excise tax system,” Henares said.

She said that even if the approved measure would yield only P33 billion a year instead of the original projection of P60 billion, it’s still a good compromise.

“We had certain ‘non-negotiables’ and we got those provisions,” she said, referring to the indexation and the two-tier provisions.

On Wednesday, the House committee on Ways and Means approved a substitute excise tax bill that would effectively raise taxes on alcohol and cigarettes.

There were 46 votes in favor of the measure as against 14 who opposed it.

Under the approved House Bill 5727 by Cavite Rep. Joseph Abaya, which included amendments pushed by the DOF, there will be three tiers for distilled spirits and fermented liquor while cigarettes will have two tiers.

Indexation of sin taxes, meanwhile, will be eight percent for every two years.

The amended sin tax measure is expected to translate to P33 billion in additional yearly revenues instead of P60 billion as was expected from the original Abaya bill.

Finance Secretary Cesar Purisima said that with Wednesday’s approval of the measure at the committee level, the bill may be enacted into law within the year.

The non-government Action for Economic Reforms (AER) meanwhile, welcomed House panel’s approval of the sin tax measure.

“We contend that if HB 5727 were to be finally signed into law in 2012, it will be a milestone in our country’s quest for health and inclusive development. It will shield the youth and the poor from our nation’s number one cause of death: smoking. It will help provide alternative livelihoods to tobacco farmers, while increasing the selling price for their produce. It will increase resources for local governments and congressional districts to better serve their constituents, fund the universal health care program, and significantly advance our country’s macroeconomic and fiscal standing,” the AER said yesterday.