‘Sin’ tax collection exceeds target in 2020 despite dampened consumption

EXCISE TAXES collected from alcoholic beverages reached P75.94 billion in 2020, the Bureau of Internal Revenue said. — REUTERS

EXCISE TAX collections from so-called “sin” products exceeded its downscaled target by less than 2% in 2020, as consumption of cigarettes, sweetened drinks and alcoholic products remained sluggish amid the pandemic.

In a statement on Monday, the Finance department said the Bureau of Internal Revenue (BIR) collected P289.98 billion from excise taxes on “sin” products last year, exceeding its revised P285.77-billion target by 1.47%. This is also 7.76% higher than the P269.1 billion collected in 2019.

Compared with its pre-pandemic goal of P332.3 billion, last year’s tally was 14.6% smaller.

Excise tax collected from tobacco products, which accounted for 51% of the total, reached P148.45 billion, beating the target of P139.12 billion by 6.7%.

Excise tax collected from alcoholic beverages stood at P75.94 billion, 23% higher than the downscaled goal of P61.87 billion. This accounted for 26% of the total “sin” tax collections.

Taxes on sweetened beverages reached P30.56 billion, which surpassed the P28.54-billion target by 7%.

“The BIR’s excise tax collections from minerals, automobiles, and cosmetic procedures were also above target in 2020,” the Department of Finance said.

This year, the government has set a target of P297.8 billion for “sin” taxes, 4.2% higher than the 2020 goal and 2.7% more than the actual collections last year.

This is broken down into P177 billion from excise taxes on tobacco products, P81.6 billion from alcoholic beverages, P39 billion from sweetened drinks, and P200 million from electronic cigarettes (e-cigarettes).

The expected increase in “sin” tax collections this year is due to the scheduled increase in taxes on tobacco and alcohol products under Republic Act Nos. 11346 and 11467. However, projections have been tempered as the economy slowly recovers from the pandemic.

Meanwhile, the Bureau of Customs (BoC) collected P171.07 billion in duties and taxes from petroleum products and coal last year.

The BIR and BoC both surpassed their reduced collection goals last year with a combined revenue of P2.43 trillion, or 11.27% over their P2.187-trillion revised target.

Economic managers slashed projected revenue targets for 2020 as tax collections were impacted by weak consumption and business closures.

Preliminary Treasury data showed the total state revenues, which also includes nontax collections, reached P2.84 trillion last year.

The BIR collected P1.899 trillion while the BoC generated P533.88 billion, exceeding their targets by 12.7% and 6.5%, respectively.

For this year, the BIR has been tasked to generate P2.081 trillion while Customs needs to collect P620 billion. — BML

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