THE Department of Finance (DoF) said it has no intention to recommend easing the tax regime on so-called “sin products” like tobacco and alcohol after collections fell, saying that the taxes are intended as a health measure.
Finance Secretary Carlos G. Dominguez III said in a Viber message: “Sin taxes are imposed to discourage consumption of products that are detrimental to health. We do wish not to exacerbate the current health crisis,” he added.
The DoF has reported that the “consistent large excise tax collection drawers, tobacco and alcohol” have fallen off in collections.
Between Jan. 1 and April 15, excise tax collections from tobacco products fell 42.5% year on year to P33.19 billion, while excise taxes from alcohol products fell 26% to P17.85 billion.
Across all products, total excise tax collections during the three-and-a-half-month period totaled P76.47 billion, down 33% year on year and 52.75% short of the P161.84-billion target.
Overall, the Bureau of Internal Revenue’s (BIR) tax collections fell 32% year-on-year to P480.64 billion, over a slightly different period, Jan. 1 to April 17.
BIR’s collections fell 89.5% year on year to P25.01 billion in the first 17 days of April.
Mr. Dominguez said withdrawals of cigarette products from factories are not allowed during the enhanced community quarantine but manufacturing, in general, is exempted from quarantine protocols if products are for export.
He said BIR remains “vigilant against illicit cigarettes” as lack of supply may encourage smuggling.
Meanwhile, several local governments have banned the sale of alcoholic beverages during the lockdown to discourage gatherings and minimize the possibility of the virus spreading further.
The Center for Alcohol Research and Development Foundation, Inc. (CARD) has asked the government to lift the ban on alcoholic drink products because liquor companies are feeling the adverse impact of weaker demand and tax hikes. — Beatrice M. Laforga
