Collection of Sin Tax Begins to Fall in Philippines

May 12, 2016 Taxation in Philippines

MANILA – Graphic health warnings on cigarettes packets in the Philippines have helped the reverse continued growth in the collection sin taxes.

New data released by the Bureau of Internal Revenue (BIR) of the Philippines on May 11th indicates that collection of taxes from the sale of alcohol and tobacco has increased over the course of this year, but the recent implementation of warning labels on cigarettes may put an end to the increases.

The collection of the “sin taxes” on the sale of tobacco and alcohol over the month of January to March rose by 22.78 percent, compared to the same period over the course of 2015.

The tax collections totalled PHP 26.62 billion, exceeding the goal of PHP 24.73 billion set for the period by the government.

However, despite the overall rise over the first three months of the year, the collection of “sin taxes” in March fell by 1.73 percent compared to collections in the previous year.

The BIR attributed the fall in March to the new requirement for tobacco manufacturers to place graphic health warnings on tobacco packaging.

Photo By: Matt Trostle