The Philippines’ Bureau of Internal Revenue (BIR) is looking to increase excise tax collections by 9.35% in 2026, mainly driven by tobacco products. In the 2026 Budget of Expenditures and Sources of Financing (BESF), the government is set to collect P359.65 billion ($6.1 billion) in excise taxes on selected goods, including P166.57 billion ($2.8 billion) from tobacco products.
BIR Commissioner Romeo D. Lumagui, Jr. said in addition to Health department’s campaign to discourage tobacco use, the government loses an estimated P114 billion ($2 billion) in revenues due to illicit tobacco trade. He said illicit tobacco manufacturers are using economic zones to avoid paying excise taxes even though the products are sold in the Philippines.
“If it’s meant for export and not for local consumption, there’s no excise tax,” Lumagui said. “It’s being manufactured here in the ecozones. That’s what they’re trying to show — that the license they’re getting is for exporting all these products.”
