By Chino S. Leyco
The Department of Finance (DOF) expects revenues from the so-called “sin” products would sustain their growth pace next year as the government intensifies its programs against illicit cigarette trade.
Finance Secretary Carlos G. Dominguez III said the government expects cigarette smuggling may increase as prices of tobacco products continue to rise as mandated by the sin tax reform law of 2012.
Dominguez disclosed he ordered Customs Commissioner Isidro S. Lapeña to intensify border control against unauthorized entry of imported cigarettes.
“I told them, Lapeña, when he was here, that [cigarette smuggling] is something you have to watch because you know already prices will go up, there are cheap producers in other countries and they will try to smuggle it here,” Dominguez told reporters at the DOF headquarter.
“I think now that the low-end producer is out of the process, prices will rise, you know what will happen when prices rise, people will be incentivized to smuggle,” he added.
This early, Dominguez disclosed the government has uncovered certain unregistered imported brands, like “Two Moon,” which already proliferated in Bulacan.
“It [Two Moon] says they are made in Thailand but we really don’t know. We saw it in Bulacan, I don’t know where it came in, we are still tracing,” he said.
Meanwhile, the DOF reported that sin tax collections jumped by 8.7 percent in the first seven-months of the year to P73.28 billion from P67.43 billion in the same period last year..
Of the total, revenues from cigarettes reached P41.04 billion, higher by 3.5 percent compared with P39.63 billion in the same period last year.
Excise taxes from alcoholic beverages, on the other hand, amounted to P32.25 billion, up by 16 percent from P27.79 billion in the previous year.
For 2018, the Finance department expects revenues from tobacco and alcohol will rise anew by 4.2 percent to P150.2 billion from P142.5 billion assumption for this year.
Of the total, the DOF expects revenues from tobacco will increase by 4.9 percent to P96.5 billion from P92 billion, while alcohol may jump to P53.7 billion or 4.3 percent from P51.5 billion.
In 2016, total excise tax collections rose to P163.5 billion from P158.3 billion in 2015.
Despite the increase in the total excise tax take, collections from tobacco products declined to P91.6 billion in 2016 from 2015’s P99.5 billion. This was despite higher rates implemented last year than in 2015 under Republic Act No. 10351 or the Sin Tax Reform Law.
DOF officials had blamed the lower excise tax collections from cigarettes last year to the impact of the graphic health warning on cigarette packs, lower removals or sales as a result of higher excise taxes, and the proliferation of fake stamps and smuggled imported products.