Sin Tax Collection Plunges by 13%

In a span of just 8 months, sintax collections decreased by 13% primarily due to the production of fake tobacco products. The pandemic however, has also something to do with the collection drop.

The Bureau of Internal Revenue (BIR) is now working to release more new stamps for cigarettes, alcoholic beverages and even electronic cigarettes (e-cig or vape) to ensure that tax collection is done properly. BIR also revealed that new security features are being added to the new stamps to prevent fake production and distribution.

According to a data shown by the Department of Finance, at the end of August 2020, a total of P140.1 billion “sin” tax have been collected out from the mentioned items. The collection is 13% lower compared to the P161.8 billion last year in the same period.

Almost P20 billion tobacco excise tax were also lost from January – August this year. The P111.3 billion excise tax for tobacco last year dropped to P95.7 billion this year.

On the other hand, excise tax for alcohol bevarages dropped to P44.4 billion from last year’s P50.5 billion.

The strict quarantine protocols from March to May may have also affected the collection, due to the closure of public establishments and the nationwide liquor ban.

Sin tax collection is already slowly improving since the strict quarantine protocols were lifted. (MLC)