Excise tax collection from the so-called “sin” products such as tobacco and alcoholic beverage fell 1.7 percent year-on-year to P8.09 billion in March, the Bureau of Internal Revenue said Wednesday.
Data from BIR showed collection in March declined from P8.24 billion registered in the same month in 2015, after the government implemented the Graphic Health Warning Law, which discouraged people from smoking.
Sin tax collection also missed the P8.54-billion collection target for the month by 5.3 percent.
BIR said despite the decline in collection in March, total sin tax collection jumped 22.8 percent in the first quarter to P26.62 billion from P21.68 billion recorded in the same period in 2015. This was also 7.6 percent higher than the target collection of P24.73 billion for the three-month period.
The sin tax law, or Republic Act No. 10351, restructured excise taxes on alcohol and tobacco products, starting January 2013 with the goal of shifting to unitary taxation by 2017.
It imposed annual adjustment on tobacco excise tax rates until 2017, when both low-priced and premium brands will have a uniform tax rate of P30 per pack.
Excise tax rate on a pack cigarettes with a net retail price of up to P11.50 increased to P25 in 2016 from P21 in 2015. The tax rate on a pack of cigarettes with a net retail price of more than P11.50 was also adjusted to P29 from P28. Both low-priced and premium brands will have a uniform tax rate of P30 per pack by 2017.
Tax on alcohol beverage included an ad valorem tax rate of 20 percent of the net retail price per proof and specific tax of P20.80 per proof liter this year.
BIR said collection from cigarette products in March amounted to P4.04 billion, down by 16.18 percent from P4.82 billion recorded in the same month a year ago. It was also 18.87 percent below the programmed P4.98 billion collection for the month.
Collection from alcohol products rose 18.72 percent to P4.05 billion from P3.42 billion and exceeded the P3.56 billion target collection for March.
Data showed that of the total remittance from alcohol products, P3.09 billion was from fermented liquors and P970 million from distilled spirits or compounded liquors.
Total volume of withdrawals of tobacco products fell 25.82 percent in March 2016 to 148.62 million packs from the 200.34 million packs in March 2015.
BIR said the decrease in volume and amount collected from tobacco products were largely due to the initial implementation of the Graphic Health Warning Law in March.
“Now augmented with the implementation of the Graphic Health Warning Law, our landmark sin tax reform continues to deliver positive health outcomes for the Filipino people,” Finance Secretary Cesar Purisima said.
“The Bureau of Internal Revenue has become more dynamic under the leadership of Commissioner Kim Jacinto-Henares. It used to box itself in as a collections agency. Today it now serves multi-dimensional functions including law enforcement and even as a catalyst for sustainable health financing,” he said.
Withdrawals of fermented liquors increased 20.31 percent to 143.55 million liters from the 119.31 billion liters in same level a year ago while withdrawals of distilled spirits or compounded liquors and wines declined 12.84 percent year-on-year to 27.42 million liters.