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Surge in tobacco excise tax collection boosts BIR’s take

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A surge in tobacco excise tax collections doubled the government’s “sin” tax collections for the month of February, according to the Bureau of Internal Revenue (BIR).

Preliminary data in a report to the Department of Finance (DOF) by BIR Deputy Commissioner Arnel SD. Guballa showed sin tax collections reached P9.2 billion or 109.85-percent higher than the amount of P8.37 billion collected in the same period last year.

Guballa said the BIR overshot its February 2021 target for tobacco excise tax collections by 4.28 percent with P17.57 billion mid-month. The growth was largely due to the payments made by Japan Tobacco International (JTI) Philippines Inc.

“We have a big increase in the collection of tobacco excises because JTI opened its plant in Lima, Batangas; so it’s in full operation [and] that’s why they increased their production. That’s also why we have quite a collection in tobacco for this month,” Guballa reported to the DOF executive committee.

The BIR official further said that JTI paid taxes of P10.94 billion or 108-percent more than the P5.25 billion it paid in January. Guballa said that with this remittance, JTI has overtaken Philip Morris Fortune Tobacco Co.  as the country’s top tobacco excise taxpayer.

The BIR noted that tobacco excise tax collections between January 1 and February 18 amounted to P29.1 billion. This is P12.33 billion or 73.53 percent more than the P16.77 billion collected for the January-February period of the previous year.

In 2017, the DOF made history by collecting from cigarette manufacturer Mighty Corp. through a tax settlement amounting to P30 billion. This is the biggest sum on record raised by the government from a tax settlement.

Hence, the DOF lauded the heightened joint campaign by the BIR and the Bureau of Customs (BOC) against tax cheats.

Forced to shut down its operations, Mighty sold its manufacturing and distribution assets to JTI Philippines. Tax collections from Mighty brands increased by an average of P2.5 billion a month since JTI took over Mighty’s operations.

The DOF is confident the BIR would be able to overshoot its P2.08-trillion collection target this year as government scrambles for funds after its poor governance of the pandemic led to an economic recession and widespread joblessness.

The DOF said raising cash would rely on the BIR’s digitization initiatives and improvement in its administrative systems. Coupled with a “dedicated” workforce and the cooperation of taxpayers, the DOF said the BIR will achieve its 2021 collection goal.

Read full article on BusinessMirror

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