Sin tax collections down in 4 months

The government’s excise tax collections from tobacco and alcoholic products declined in the first four months following the imposition of liquor bans and movement restrictions due to the coronavirus pandemic.

In an online forum hosted Wednesday by the Action for Economic Reforms, Finance undersecretary and chief economist Gil Beltran said total excise tax collections from alcohol and tobacco products from January to April dropped by 57 percent to P30.6 billion from P71.2 billion in the same period last year.

About P16.9 billion of the amount came from tobacco excise tax collections, while the remaining P13.7 billion came from alcohol sin taxes.

For April alone, tax collections from these products dropped by 99 percent to only P200 million from P18 billion in the same month last year.

Beltran attributed the decline to the declaration of community quarantine measures in different parts of the country, the imposition of liquor bans by various local government units as well as the overall decline in the demand for sin products amid the COVID-19 crisis.

“The lockdown did not enable the manufacturers to get their workers to work. And second, during the lockdown, you cannot sell cigarettes. They were prohibited from transporting those products during the lockdown,” Beltran said, adding that “the lockdown was imposed on non-essential items, and cigarettes and alcohol are non-essential.”

Citing data from the Bureau of Internal Revenue (BIR), Beltran said the volume of cigarette removals from factories in the first four months contracted by 72 percent to 376.3 million packs from 1.34 billion a year ago.

The volume of fermented liquors transported from factories likewise dropped by nearly 50 percent yearon-year to 362.8 million liters from a year ago, while removals of distilled spirits declined by 51.8 percent to 71.5 million liters.