Cigarette tax revenue down 3.16% in 7 months

MANILA, Philippines – Tax revenue from tobacco products declined in the first seven months despite new tax adjustments this year.

The Bureau of Internal Revenue (BIR) said taxes from cigarettes totaled P8.81 billion in July, down 3.16 percent from the same period a year ago.

The latest figure brought the seven-month tally to P53.71 billion, representing a slight 1.98-percent decline year-on-year.

Officials could not be immediately reached for comment. Tobacco taxes were among those adjusted under RA 10351 passed in 2012, which reformed excise levies on products considered detrimental to public health.

The latest round of increases was implemented at the start of the year. By next year, tobacco products will be put under a unilateral tax regime which will make taxes uniform for imported and locally produced tobacco products.

This will be down from the original four before the reform law was passed.

In contrast, revenue collected from alcohol remained up in July and for the first seven months, BIR data showed.

During the first full month of the Duterte administration, income from alcohol improved 17.07 percent to P3.81 billion from the previous year. From January to November, income was up 21.7 percent to P28.09 billion.

Cumulatively, sin taxes totaled P81.79 billion for the first seven months, still a 5.04-percent improvement from P77.87 billion a year ago.

As a proportion of total BIR collections, sin taxes accounted for 9.05 percent of the P904 billion raised from January to July.

The Department of Finance is pushing for new hikes in excise taxes under the comprehensive tax reform program.

Finance Undersecretary Karl Kendrick Chua earlier said the DOF would wait until the full implementation of the last reform by 2017 before pushing for another one.

Under the current law, tax adjustments will be fixed at four percent every year starting next year to take into account inflation.