With sin tax approved, BIR 2013 collection target hiked to P1.272-T

MANILA, Philippines – The 2013 collection target of the Bureau of Internal Revenue (BIR), which collects about 3/4 of the country’s revenues, has been increased to P1.272 trillion following the landmark approval by lawmakers of the sin tax measure.

The sin tax bill, which increases the excise tax imposed on tobacco and alcohol products, would translate to P33.96 billion in additional revenues for 2013, which would effectively raise the BIR’s 2013 target from the original goal of P1.238 trillion.

This 2012, the BIR is tasked to collect P1.066 trillion.

The Senate and the House of Representatives approved the sin tax measure on Tuesday, December 11, and is expected to be signed into law by President Benigno Aquino III before end-2012.

“This version will allow a collection of P33.96 billion in incremental revenues from tobacco and alcohol for the next year and P184.31 billion over the next four years, adequately covering the financing requirements outlined by the Department of Health for the Aquino administration’s Universal Health Care program,” Finance Secretary Cesar Purisima said.

Purisima has been a staunch supporter of the sin tax measure and has spearheaded efforts for a bill that originally sought a P60 billion additional revenues.

Nonetheless, he also thanked the lawmakers for the passing a measure that would finally reform the 15-year-old sin tax regime in the country

“The passage of the excise tax reform on tobacco and alcohol marks a historic victory for health and revenue reform in the Philippines,” he said.

The approved measure also removes the price classification freeze that has pegged tobacco products to 1996 prices as the basis for their tax classification.

“This version provides for a unitary tax regime by 2017 for tobacco and fermented liquor, a shift from the current multi-tiered system that has allowed smokers to downshift to lower-priced products,” he said.

As a health measure, the approved sin tax bill also indexes the tax rates of tobacco and alcohol by 4% every year so that these products do not become more affordable over time.

More importantly, Purisima said the measure reflects the Aquino administration’s good governance agenda by pushing to reform the 16-year old sin tax regime existing in the country.

“President Aquino’s agenda for good governance has succeeded in working with industry vested interests for the benefit of the country,” Purisima said. – Rappler.com