Alcohol, tobacco excise taxes breach govt targets

Taxes imposed on liquor, tobacco, and petroleum products slightly breached government targets for the first six months this year, the Department of Finance (DOF) said on Thursday. The government was able to collect P29.448 billion in excise taxes, almost five per cent higher than revenue targets of P28.088 billion during the period. Excise taxes from alcohol rose by 1.64 per cent to P10.229 billion, exceeding collection expectations of P10.064 billion. Despite the increase, the collection was P47.452 million lower than last year’s P10.276 billion.

Meanwhile, excise taxes on tobacco products failed to meet revenue goals for the period. Instead of P12.084 billion, tobacco tax collection for the period was 15.4 per cent lower to P10.222 billion. The same figure is also sharply lower than last year’s total take of P13.502 billion. Similarly, excise taxes on petroleum products were also unable to meet revenue targets. The government was only unable to meet its P4.471 billion goal as collections plunged by 64 per cent. Last year, excise taxes on petroleum products reached P4.700 billion. Mining and mineral product excise taxes likewise rode the trend. The total take from this category declined 31 percent to P242.532 million. As a result, the government was unable to meet excise mineral tax goals of P489.273 million. Miscellaneous product excise taxes also slid 31 percent year-on-year, hitting only P923.197 million from last year’s P1.090 billion. However, the tobacco excise inspection fee went beyond its forecast of P3.123 million. The government was able to collect a total of P486.361 million from the said tax, the DOF said. Bill hiking alcohol, tobacco taxes to face rough sailing In a related development, proposed legislation to simplify taxes on liquor and cigarettes will face “rough sailing" in the Senate, which, in turn, may further impair the government’s ability to balance the budget. The Senate may find it difficult to approve the new excise tax measure “will affect the masses," Senate Majority Leader Juan Miguel Zubiri said Thursday. Although he remains supportive of the proposed law, “the new Senate leadership had made a promise that there will be no new taxes," he added. Once enacted, the measure will earn an additional P20 billion in revenues for the first year of the law’s implementation, P40 billion for the second year, and up to P70 billion for the third year. For his part, Senate President Juan Ponce Enrile said that the government should devise more creative ways to stimulate the economy instead of imposing additional taxes. “The people are in need of concrete reliefs. They cannot take on any more additional tax burdens," the Senate President said. Over-taxing the people might result in a rapid deterioration of the economy and massive poverty, he added. For his part, Senator Panfilo Lacson said President Gloria Macapagal Arroyo should be blamed for the “lousy" sin tax measure passed by the Congress in the past. He claimed that the President met with the two cigarette manufacturers even before Congress started its debate on the issue and allegedly allowed the reclassification of the brands of the said manufacturers. “[President Arroyo] should be blamed because she personally interceded for the cigarette manufacturers," Lacson said. Health advocates support bill for higher tobacco taxes In her State of the Nation Address on Monday, President Arroyo said taxes should come from alcohol and tobacco and revenues that will be collected from these will be used to finance the education. Earlier, Finance Secretary Margarito B. Teves earlier expressed his commitment to work with lawmakers to ensure passage of the excise tax reform law. In a separate statement, health groups supported the President’s call to increase taxes on tobacco. Instead of rejecting higher tobacco taxes, Senator Enrile and Congressman Exequiel Javier should cooperate with the President “in reforming the tobacco and alcohol taxation system to deliver higher revenues from these sin products," health advocates said. The group included the Framework Convention on Tobacco Control Alliance Philippines (FCAP), Philippine Medical Association (PMA), Philippine College of Chest Physicians (PCCP), and the Philippine College of Physicians (PCP). “We have called on our legislators to secure additional funds our country needs to combat the effect of a global economic slowdown through tobacco and cigarettes that are hazardous to health and should not be promoted in the first place. But the influence of the tobacco industry prevailed," Dr. Melchor Santos, PMA president said. Higher taxes on alcohol and tobacco “can greatly help the Department of Finance (DoF) to raise funds that will plug a ballooning deficit," Dr. Maricar Limpin, FCAP Executive Director, said. - With Amita O. Legaspi, GMANews.TV