The excise taxes collected from harmful products such as alcohol and tobacco jumped by more than 20% in July in the Philippines, following the implementation of higher tax rates earlier in 2015 (Republic Act No. 10351) and as a result of better compliance by taxpayers.
Data from the Philippine Bureau of Internal Revenue (BIR) showed that excise tax collections from cigarettes and alcohol products rose by 20.9% since July 2015. The tax increase added P2.1 billion to the government’s budget, compared with last year’s revenue. The alcohol tax alone rose by 14.1% and generated P3.1 billion.
As of the end of July, the excise tax collections from cigarettes and alcohol products totaled P65.7 billion, 17.1% higher than the P56.1 billion collected in the first seven months of 2014.
The law restructured the excise taxes on alcohol and tobacco, with higher tax rates introduced in order to reduce the consumption of harmful products and promote better health in the Philippines.
Also, the BIR has tightened its monitoring practices of the tobacco industry’s tax payments through the Internal Revenue Stamps Integrated System (Irsis). This system will also be applied to the alcohol industry by the end of 2015.
This means that in the first two years of implementation, the tax reform concerning alcohol and tobacco industry, raised an additional P104 billion to finance the Philippines universal health care programs.