BIR eyes P338 billion from excise taxes

MANILA, Philippines — The Bureau of Internal Revenue (BIR) targets to collect higher excise taxes of up to P338 billion this year as the government moves to improve the regulatory environment and continues to address illicit trade.

BIR data showed that excise tax collection for 2025 is projected to hit P337.8 billion, up by more than 11 percent from last year’s P303 billion tax take.

The excise tax collection forms part of the overall P3.232-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, sweetened beverages and minerals.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said faster economic growth this year on the back of the midterm elections would support higher excise tax collections.

Ricafort said this means that there would likely be more consumption of “sin” products both at the national and local levels.

This will be complemented by efforts to intensify tax collection and compliance among businesses.

Broken down, about 44 percent of the excise tax is expected to come from tobacco products at P148.92 billion. The amount is expected to improve by 10.7 percent from last year’s P134.52 billion.

This will be followed by alcohol products at P130.04 billion, up by 12 percent from the 2024 collection of P116.09 billion.

The BIR is likewise seeing a 4.2-percent rise in sweetened beverage excise taxes to P39.28 billion this year from   P37.68 billion in 2024.

Excise tax on minerals is projected to jump by almost 50 percent to P12.84 billion this year as the government eyes the passage of the new mining fiscal regime.

Further, the BIR aims to collect P6.5 billion from automobile excise.

Last year, total excise taxes expanded by 3.86 percent to P303 billion.

While the amount was 6.7 percent lower than the collection goal of P325 billion, it was an improvement from the 13-percent shortfall recorded a year ago.

“Faster economic growth this year on the back of the midterm elections would support higher excise tax collections.”