Excise tax collections from the sale of tobacco and alcohol products continued to outpace the government’s target in the first nine months of the year, according to the latest data released by the Bureau of Internal Revenue.
The BIR collected PHP 78.3 billion in excise taxes from January to September this year, exceeding its goal for the period by 21.4% or PHP 13.8 billion.
Last year, excise tax collections surged 81.2% to PHP 100.9 billion with the incremental revenue under the sin tax reform amounting to PHP 51.1 billion.
Internal Revenue Commissioner Kim Henares attributed the overwhelming growth in excise tax collections to the implementation of the amended sin tax law which increased the tax on tobacco and alcohol.
Henares said higher-than-expected collections invalidate allegations that the government is losing substantial revenues through illicit trade as insinuated by the report prepared by the International Tax and Investment Center (ITIC) and Oxford Economics.
The report claimed that illicit tobacco consumption accounted for 18.1% of the 105.5 billion cigarettes sold locally.
Henares, however, said the agency was not totally discounting the fact that illicit cigarette consumption exists as it has become a worldwide concern.
She assured the public that the government remains true to its commitment to run after tax evaders.
According to the Oxford Economics report, the Philippines has become one of the biggest markets for illegal cigarette trade among member countries of the Association of Southeast Asian Nations (ASEAN), with illicit consumption almost tripling in 2013.
Illicit tobacco consumption in the Philippines accounted for 34.5% of all untaxed cigarettes consumed in the 14 countries studied, the second highest after Vietnam which took up a 39% share.