Tobacco excise tax collections exceed target

MANILA, Philippines — The Bureau of Internal Revenue (BIR) exceeded its excise tax collection target from tobacco in February after Japan Tobacco International (JTI) Philippines more than doubled the amount of taxes paid during the review period.

In a report to the Department of Finance, Internal Revenue Deputy Commissioner Arnel Guballa said excise tax collections as of mid-February already surpassed the target of P16.85 billion for the month by 4.28 percent with collections of P17.57 billion.

This after JTI Philippines paid taxes of P10.94 billion during the month, which was 108 percent higher than the P5.25 billion it paid in January.

The February excise tax collection was also 109.85 percent more than the amount of P8.37 billion collected in the same period in 2020.

“Noticeably, we have a big increase in the collection of tobacco excises  because JTI opened its  plant in Lima, Batangas. So it’s in  full operation, that’s why  they increased their production. That’s also why we have quite a collection in tobacco for this month, sir,” Guballa  said.

Since January, excise taxes from tobacco amounted to P29.1 billion, higher by 73.53 percent  than the P16.77 billion collected for the January to February period of the previous year.

Guballa said that as of Feb. 18, JTI Philippines overtook Philip Morris Fortune Tobacco Co. (PMFTC) as the top tobacco excise taxpayer, with JTI’s remittance accounting for 62 percent of the total collection from Feb. 1 to 18.

In 2017, JTI took over the manufacturing and distribution operations of Mighty Corp. after it was forced to shut down operations following a record tax settlement of P30 billion with the government.

With the acquisition, JTI Philippines now manufactures and distributes the cigarette brands Mighty and Marvel, in addition to their own brands Winston, Mevium, and Camel.

DOF said tax collections from Mighty brands increased by an average of P2.5 billion a month since JTI took over its operations.

Finance Secretary Carlos Dominguez   earlier expressed confidence that the BIR would be able to overshoot its P2.08-trillion collection target this year because of digitalization initiatives and improved administrative systems.