DOF: ‘Sin’ tax collections reached P269.1b last year

The Finance Department on Friday said tax collections from “sin products,” redefined recently to include sweetened beverages, have raised P269.1 billion in revenues in 2019, almost double the P143.5 billion collected from alcoholic drinks and cigarettes in 2015, the year prior to the assumption of President Rodrigo Duterte in office.

DOF estimates show the government would be able to raise this year around P332.3 billion from ‘sin’ taxes, given that ‘sin’ products will also cover electronic cigarettes such as heated tobacco products and vapor (vaping) products. It also cited further increases in the excise taxes on alcohol and tobacco products. 

‘Sin’ tax collections will be primarily used to augment funding for the implementation of the Universal Health Care program, which starts this year. The  program aims to provide affordable access to inpatient and outpatient services to all Filipinos, especially low-income families—in step with the ultimate goal of President Duterte to provide a decent life to every Filipino.

Higher ‘sin’ taxes also aim to deter the consumption of unhealthy products to help lower healthcare costs and promote a healthy citizenry. 

“In 2015, the total revenues from ‘sin’ products was P143.5 billion. Last year, in 2019, the total was P269.1 billion or 87.5 percent more. Starting 2020, ‘sin’ taxes now include the collection of excise taxes on tobacco, alcohol, sweetened beverage and e-cigarette products,” DoF Undersecretary Karl Chua said in his report to Finance Secretary Carlos Dominguez III during a recent DOF executive committee meeting. 

Chua said the 2020 revenue estimate of P332.3 billion from ‘sin’ products represent a 131.6-percent increase from the 2015 collection. 

By 2024, conservative DOF estimates show the government will be able to collect about P480 billion. “This is a low-end projection,” Chua said. 

The new set of ‘sin’ taxes comprise Package 2 plus of the Comprehensive Tax Reform Program, which the state economic team is pushing to make the taxation system simpler and fairer for all Filipinos and at the same time raise sufficient funds for President Duterte’s high-and inclusive-growth agenda.

Republic Act 11346, or the Tobacco Tax Reform that was signed into law in July 2019, increased excise taxes on tobacco products to P45 per pack starting this year and P5 per pack thereafter until the rate reaches P60 per pack in 2023. Starting 2024, the tax rate will be increased by 5 percent each year. 

The law also introduced a new tax on e-cigarettes such as HTPs and vapor products.    

RA 11346 is expected to raise P14.9 billion this year and P125.8 billion by 2024 from cigarettes alone, Chua said.

Topics: Department of Finance , DOF , Sin tax collections
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