‘SIN’ tax revenues in March down by P2.25 billion


“Sin” tax take fell short of its March target by P2.25 billion despite the new excise-tax law that took effect at the start of 2013.

Kim S. Jacinto-Henares, Bureau of Internal Revenue (BIR) commissioner, said over the weekend that the decline in excise-tax revenues dragged the government’s main tax agency’s collection in March.

Tax collection dropped by P340 million to P74.8 billion in March this year from P75.2 billion in the same month last year.

Henares attributed the collection shortfall to early withdrawal of stock from warehouses by cigarette manufacturers to avoid the payment of a higher levy.

She said the government had factored a significant drop in excise-tax revenues in the first six months of the year after several tobacco companies front-loaded inventories in December 2012.

Henares added that the BIR expects excise-tax revenues to increase starting July this year, or once manufacturers run out of old stock. “It is not a loss, we aim to recover that in the second half of the year. The decrease in collection for the first half was projected and is basically coming in as projected,” she said.

Henares added that they have factored a 70-percent decline in volume in January alone, while excise-tax revenues dropped by only 50 percent during the month.

The BIR said it expects excise-tax collection to rise by 44 percent with the implementation of Republic Act 10351 or the Sin Tax Reform Act of 2012, which provides for higher rates on tobacco and alcoholic products and signed by President Aquino late last year.

The BIR is looking at possibly collecting P102.4 billion in excise tax on cigarettes and liquor this year, well above the P71.2 billion targeted in 2012, which will result in a higher share in BIR’s total collection goal to 8.2 percent this year from 6.6 percent last year.

The bureau said the new sin-tax law would pave the way for a collection of P33.96 billion in incremental revenues from tobacco and alcohol this year and P184.31 billion over the next four years.

Though lower than the Department of Finance’s P60-billion target, the P33.96 billion, according to government officials, will be enough to cover funding requirements set by the Department of Health under the government’s universal health care program.

Paul Anthony A. Isla

Source:
http://www.businessmirror.com.ph/index.php/news/top-news/12408-sin-tax-r...