BIR eyes P325 billion from excise taxes

MANILA, Philippines — The Bureau of Internal Revenue (BIR) targets to collect higher excise taxes of up to P325 billion this year as the government moves to improve the regulatory environment and address the still rampant illicit trade.

BIR data showed that excise tax collection is seen rising by 11 percent to P324.55 billion this year from last year’s P291.73 billion tax take.

The excise tax collection forms part of the overall P3.055 trillion target of the BIR as set by the Cabinet-level Development Budget Coordination Committee.

Excise tax is a levy on the production, sale or consumption of a commodity. It contributes around 12 percent to the overall collection of the BIR.

Excisable products include alcohol, tobacco, petroleum and minerals, among others.

BIR Assistant Commissioner Jethro Sabariaga said the agency is banking on various measures in order to hit the target.

“We are improving the regulatory environment as well as data governance and combating illicit trade,” Sabariaga told The STAR.

The BIR has been reeling from the illicit trade of tobacco in the country, which contributes to why the agency has been missing its collection target for excise products.

There is also the transition to vape products. The BIR has difficulties in going after illegal ones given that it has become a backyard industry whose production can be done even at home.

“We’re also focusing on internal revenue stamps for vape and enforcing the SC (Supreme Court) decision on BIR’s right to classify products for taxation purposes, particularly on sugar-sweetened beverages,” Sabariaga said.

On the other hand, the BIR official said inflation would be a major challenge in hitting the target for the year.

Inflation is expected to decline this year, largely due to high base effects, but the Bangko Sentral ng Pilipinas earlier said risks remain tilted to the upside.

“There’s inflation because the less money you can spend, the less excisable goods you will consume,” Sabariaga said.

“There’s also the challenge of smuggling and non-cooperation from other government stakeholders,” he added.

About 47 percent of the excise tax this year will come from tobacco products at P152.04 billion. This is expected to improve by 13 percent from last year’s P134.87 billion.

This will be followed by alcohol products at P116.51 billion, up by 7.4 percent from P108.46 billion in 2023.

The BIR also expects a six percent rise in sweetened beverage excise taxes to P36.47 billion from P34.37 billion.

Excise tax on minerals is projected to jump by 33 percent to P10.89 billion as the government eyes the passage of the new mining fiscal regime.

The BIR also aims to get P5.8 billion from automobile excise and a fresh P2.33 billion from single-use plastics following the expected enactment of the excise tax on the commodity.