EXCISE tax collections on “sin” products from January to September slid by 8.5 percent year-on-year as Covid-19-induced lockdowns dampened consumer demand.
Preliminary data obtained by the BusinessMirror showed sin tax collections of the Bureau of Internal Revenue (BIR) and Bureau of Customs (BoC) for the nine-month period dropping to P193.7 billion this year from P211.8 billion in the same period last year.
This, despite the 38.8-percent surge in excise tax take on sin products for the month of September to P29.2 billion this year from P21 billion in the same month last year.
Finance Assistant Secretary Maria Teresa Habitan told the BusinessMirror this increase in September was prompted by “pent-up demand” that came after months of lockdown with liquor ban.
For September this year, double-digit growth rates were also recorded for the excise tax collections for tobacco and alcohol.
Excise tax take for tobacco jumped by 66.4 percent to P19.1 billion in September this year from P11.5 billion in the same month a year ago.
For the same month, excise tax collected from alcohol rose by 14.5 percent to P7.4 billion this year from P6.5 billion in 2019.
On the other hand, the tax take from sweetened beverages in September sank by 14.2 percent to P2.6 billion this year from P3 billion last year.
Habitan said the drop in the government’s excise tax collection for sweetened beverages showed a lesser public demand for soft drinks.
There was no collection from electronic cigarettes (e-cigarettes) for September this year.
For January-to-September period, sin tax collections from tobacco, alcohol and sweetened beverages were also lower this year compared to the same period a year ago.
Among the three, the excise tax take in sweetened beverages posted the biggest decline. It dropped by 14.4 percent to P27.3 billion this year from P31.9 billion last year.
It was followed by alcohol, which yielded only P51.7 billion from January to September, 9.3 percent lower than last year’s P57 billion.
Excise tax take from tobacco reached P114.6 billion, 6.8 percent short of last year’s P123 billion.
E-cigarettes
Meanwhile, collection from e-cigarettes inched up by P0.2 billion during the nine-month period this year from none last year as Republic Act 11346, which increased taxes on tobacco products and introduced a tax on e-cigarettes, was only signed on July 25 last year and took effect only this year.
Nonetheless, Habitan expressed optimism that the government can hit the full-year revised target for sin tax collection pegged at P235.3 billion.
“Looks like we will meet the revised target, if the trend continues,” she said.
While she admitted that the recent typhoons may affect the demand for sin products, Habitan is confident there will be an increase in sin tax collections for the rest of the year as she expects more people to consume alcohol and tobacco especially during the holiday season.
“That could dampen demand somehow, though the holidays could still push it up kahit papaano [somehow],” she said.