JTI Boosts Philippines’ Tax Collections

The Philippines’ tobacco tax receipts have been substantially boosted by Japan Tobacco International’s (JTI) recent expansion in the country, reports Business World.

As of Feb. 18, the Bureau of Internal Revenue (BIR) had collected PHP29.1 billion ($598.43 million), up 73.5 percent from a year earlier.

The BIR was also above target for the month by about 4.3 percent. According to the Department of Finance, the bureau had collected PHP17.57 billion from excise taxes on tobacco products, exceeding the target for the month of PHP16.85 billion.

The tax take was 110 percent higher than the total collected in the equivalent period from the previous year.

BIR Deputy Commissioner Arnel Guballa said the bureau collected more taxes from JTI, which had expanded its Batangas factory.

“Noticeably, we have a big increase in the collection of tobacco excises because JTI opened its plant in Batangas. So it’s in full operation … That’s also why we have quite a collection in tobacco for this month,” Guballa said.

JTI Philippines established a manufacturing plant in Batangas City in 2017 and expanded last year.

JTI Philippines also acquired the tobacco business of Mighty Corp. in August 2017 for PHP46.8 billion, adding the Mighty and Marvels brands to its lineup.

Bulacan-based Mighty shut down in July 2017 after a series of tax evasion complaints before the Justice Department due to its use of fake tax stamps. Its total tax settlement with the government amounted to PHP30 billion.

According to the Department of Finance, tax collections from Mighty surged immediately after the takeover.

Recent laws raised the excise taxes on tobacco products along with other “sin” products, such as alcohol and electronic cigarettes.

The BIR is tasked to collect PHP2.081 trillion this year, which if achieved would be up 7 percent on its actual collections in 2020.