Philippines’ tax reform delivers growth

Tobacco and liquor tax revenues in the Philippines grew last year at the fastest rate on record, according to a story in The Philippine Star quoting the Bureau of Internal Revenue (BIR).

Last year, the third year following significant tax reforms in the country, saw the so-called ‘sin’ tax revenues reach P141.84 billion, up by more than 25 percent on those of the previous year, P112.81 billion.

Revenues from cigarettes increased last year by 32 percent to P100.02 billion.

Sin tax collections growing by a full quarter in one year was no small feat, said Finance Secretary Cesar Purisima in a statement.

‘With the figures in for its third year of implementation, sin tax reform is a lesson in good governance,’ he added.

The tax law reform, which provides for specific excise rate adjustments until 2017, was packaged as a health measure to deter smoking and excessive drinking, as well as a chance to provide funding for government health programs.

However, BIR figures show that the supply of cigarettes and fermented liquors to the market rose last year, suggesting an increased consumption of sin products.

The volume supply of cigarettes increased last year by 9.12 percent, while the supply of fermented liquors increased by 1.44 percent and the supply of distilled spirits and wines decreased by 4.19 percent.