According to a report from Bworld Online on October 20, the Philippines Bureau of Internal Revenue (BIR) will not be able to meet its consumption tax revenue target of 362.2 billion Philippine pesos (approximately 6.3 billion US dollars) this year due to a decrease in demand for tobacco products.
BIR Assistant Commissioner Jethro Sabariaga has stated that tobacco consumption tax accounts for over 40% of national consumption tax revenue. However, tobacco consumption has been steadily decreasing over the past decade.
Nowadays, it is rare to see someone smoking, and this shift in market demand can be felt intuitively.
He also added that the tax revenue growth from other taxable goods cannot make up for the decline in tobacco consumption tax.
Consumers switching to e-cigarette products has also affected government tax revenues. According to the commissioner, the consumption tax on one e-cigarette is equivalent to the tax on one pack of cigarettes, but e-cigarettes are often consumed more slowly.
A smoker who switches to e-cigarettes, typically someone who consumes 10 to 15 packs of cigarettes a month, may only purchase one e-cigarette product, or even worse, may only buy one every two months.
Previously, Bureau of Internal Revenue (BIR) Director Romeo D. Lumagui pointed out that illegal tobacco trade has also posed challenges for authorities in collecting consumption taxes. In the first half of 2024, the agency lost approximately 7.2 billion Philippine pesos (1.2 billion USD) in potential revenue due to seized tobacco and e-cigarette products.
As of the end of August, BIR collected 194.93 billion pesos (34 billion US dollars) in consumption taxes, with tobacco product revenue accounting for 844.2 billion pesos (15 billion US dollars), or 43.31% of the total consumption tax collected.
Notice
1. This article is provided exclusively for professional research purposes related to industry, technology and policy. Any reference to brands or products is made solely for the purpose of objective description and does not constitute an endorsement, recommendation, or promotion of any brand or product.
2. The use of nicotine products, including but not limited to cigarettes, e-cigarettes, and heated tobacco products, is associated with significant health risks. Users are required to comply with all relevant laws and regulations in their respective jurisdictions.
3. This article is strictly restricted from being accessed or viewed by individuals under the legal age.
Copyright
This article is either an original work by 2Firsts or a reproduction from third-party sources with the original source clearly indicated. The copyright and usage rights of this article belong to 2Firsts or the original source. Unauthorized reproduction, distribution, or any other unauthorized use of this article by any entity or individual is strictly prohibited. Violators will be held legally responsible. For copyright-related matters, please contact: info@2firsts.com
AI Assistance Disclaimer
This article may have utilized AI to enhance translation and editing efficiency. However, due to technical limitations, errors may occur. Readers are advised to refer to the sources provided for more accurate information.
This article should not be used as a basis for any investment decisions or advice, and 2Firsts assumes no direct or indirect liability for any errors in the content.
