BIR targets P85 billion from sin taxes

The Bureau of Internal Revenue (BIR) is targeting to collect a total of P85 billion this 2013 from the sin taxes.

Philippine Star reported the government is highly confident to reach its goal as the revenue agencies are on track to reach the said amount from cigarettes, liquor and tobacco according to Finance Secretary Cesar Purisima.

Commissioner Kim Henares of BIR disclosed on the said report that ‘sin tax collections have significantly gone up despite the obvious effort of tobacco and liquor companies to dodge the higher rates by taking advantage of a loophole in the law.’

Before the higher rates took effect, Henares said many companies “frontloaded” or advanced the delivery of their products to their retail outlets at old prices and old tax rates.

She said they expect frontloading again before the next adjustment takes effect early next year.

Marikina Rep. Miro Quimbo, chairman of House of Representatives ways and means committee said that he welcomed the report of Henares.

He said sin tax rates were frozen for about 16 years before the House, under the leadership of Speaker Feliciano Belmonte Jr. and with the blessing of President Aquino, mustered enough political will to adjust them.

However, Quimbo was disappointed that the higher cigarette taxes have not discouraged people from smoking and exposing themselves to smoking-related ailments.

“I am concerned about this because this has been presented as a health measure, particularly in the Senate where the debates had been more intense than in the House,” he said.

With these, he considered of reviewing the Sin Tax Law which took effect last January this year.

He recalled that during the debates on the measure, cigarette and liquor companies had predicted that the higher rates would result in significant drop in consumption and could even prompt them to close shop.

He sought the opinion of Henares on why the objective of the bill to discourage people from smoking and prevent more people from dying due to smoking-related illnesses has not been achieved.

Henares offered two reasons: frontloading of sin products and a shift to cheaper cigarettes and liquor by smokers and drinkers. She indicated that the blame lies with the House and the Senate. -Philstar/IMT