MANILA, Philippines – Strong consumption pushed excise tax collections from petroleum products to a six-year high as of November last year despite a double-digit drop in global oil prices.
According to data from the Bureau of Internal Revenue (BIR), excise levies on oil hit P10.96 billion from January to November last year, up 29.52 percent from year ago figures.
The 11-month collections mark the highest since 2009 when yearly collections hit P12.772 billion. Additional revenues were recorded in December, data for which will be released next month.
BIR officials could not be immediately reached for comment yesterday.
“Excise taxes are specific taxes on products per consumption. Since auto sales hit all-time high, more cars demand more gas ergo the increase (in taxes),” said Alvin Ang, economist at Ateneo de Manila University.
Vehicle sales rose 23 percent last year to 288,609 units, according to last week’s report from the local automotive industry.
This is on the back of the slump in global oil prices which tumbled by an average of 40 percent last year due to a supply glut. High supplies and low prices usually boost demand. High demand increases tax collections.
Specifically, Dubai crude, the benchmark for Asia, dropped to $34.70 a barrel by end of 2015 from $60.39 in 2014.
Aside from excise taxes, the government also slaps Customs levies on imported oil. Last week, the Bureau of Customs reported that it missed its 2015 target as low oil rates dented valuations.
While valuations are used to compute for import duties, Ang said a different accounting method is observed for excise taxes.
“Since (excise taxes) are specific, they are levied on the product independent of the price of the product like oil,” he explained.
Aside from oil, excise taxes are also charged from imported vehicles, tobacco, alcohol and liquor products.
In Revenue Memorandum Order 1-2016 released last week, BIR Commissioner Kim Jacinto-Henares centralized the issuance of permits for the release of products charged with excise taxes to better track them.
BIR, which accounts for more than 80 percent of state revenues, collected P1.327 trillion from January to November last year. This was up 12 percent year-on-year.
It was tasked to collect P1.974 trillion in 2015.