Excise tax collection expected to go down

THE government expects its collection from excise taxes to go down 9.6 percent next year to P55.645 billion from this year’s programmed revenues of P61.552 billion, according to official government budget data.

The 2011 excise tax target as shown in the Budget of Expenditures and Sources of Financing (BESF) under the proposed 2011 national budget is below the P59.8 billion actual excise tax collection in 2009.

BESF data showed that excise tax revenues from tobacco products will drop to P20.181 billion from this year’s target of P25.589 billion or a decline of P5.408 billion, posting the biggest decline in revenues among the “sin” and fuel products.

Excise tax collections from alcohol next year will also fall albeit slightly to P22.492 billion from P22.589 billion or a slump of P97 million.

Petroleum products will likewise yield lower excise taxes, falling 3.52 percent to P10.430 billion in 2011 from P10.811 billion this year. Excise taxes from petroleum and fuels registered a high of P12.772 billion in 2009.

Alcohol and tobacco products are the two biggest excise tax revenue sources.

Excise tax revenues from “other products” such as automobiles, however, will grow to P2.543 billion from this year’s programmed P2.339 billion, an expansion of P204 million.

The lower excise tax revenue goal forms part of the P940 billion revenue mission of the Bureau of the Internal Revenue (BIR) in 2011.

It also does not take into account pending legislations in Congress seeking to raise the sin tax rates for alcohol by 10 percent and that of cigarettes by P3 per pack.

The government has already collected P32.284 billion in excise taxes in the first six months of the year, up 9.6 percent from the year-ago figure of P29.446 billion.

This brings the full year target of P61.552 closer by P29.268 billion.

An excise tax is an inland tax on the production for sale or sale of specific goods or products.

The government is hard-pressed to shore up revenues in the remaining months of the year to plug a record breaking programmed deficit of P325 billion or 3.9 percent of the gross domestic product (GDP) from the Arroyo-pegged deficit goal of P293 billion, which was later revised to P300 billion.

The new government seeks to improve its tax effort from the current level of 12.8 percent to the Asian average of 16 percent during its first three years in power. This year’s tax effort goal is 13.8 percent.

The Aquino government said about $4.5 billion to $5 billion in revenues or 3 percent of GDP is lost yearly due to lower tax effort.

The last time the country came at par with the Asian average tax effort was in 1997 when the government posted 17 percent.


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