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Philippine Tax Office Confirms Significant Drop in Consumption Tax

Jan.13.2025
Philippine Tax Office Confirms Significant Drop in Consumption Tax
Philippine BIR confirms a staggering tax revenue loss of 40 billion pesos due to declining consumption taxes from 2021 to 2024.

According to The Inquirer on January 10th, the Philippine Bureau of Internal Revenue (BIR) has confirmed that there has been a decrease in consumption tax revenue from 2021 to 2024, resulting in a tax revenue loss of up to 400 billion pesos (approximately 7 billion US dollars) during this period.


The Bureau of Internal Revenue (BIR) revealed during a hearing at the Senate Committee on Ways and Means that tax revenue is projected to decrease from 174 billion pesos (3 billion USD) in 2021 to 134 billion pesos (2.3 billion USD) in 2024. Senator Sherwin Gatchalian, who chairs the committee, highlighted the committee's focus on illegal trade of tobacco products, heated tobacco products, e-cigarettes, cigars, and cigarettes. He also mentioned that the projected loss in e-cigarette tax revenue in 2024 is 64 million pesos (1.1 million USD).


The head of the Bureau of Internal Revenue's Large Taxpayers Service Office, Dondanon Galera, stated that the decrease in consumption tax revenue is due to changes in the smoking habits of consumers, shifting from traditional cigarettes to e-cigarettes and illegal trade. He added that the BIR has started enforcing actions against illegal cigarettes and e-cigarettes, with 141 enforcement actions taken against illegal e-cigarettes in 2024 alone.


Jericho Nograles, Chairman of the Philippine Tobacco Institute (PTI), stated that the government has lost 520 billion pesos (9 billion USD) in tax revenue due to the smuggling of e-cigarettes and tobacco products. PTI recommends addressing the issue of illegal tobacco trade comprehensively to avoid harming the interests of tobacco farmers and tax revenue.


References:
[1] BIR: P40B in excise taxes lost due to illicit cigarette, vape trade
Also Read:
[1] Philippine Finance Department: Tobacco and E-cigarette Smuggling Costs $900 Million Annually
[2] Philippine BIR to Intensify Crackdown on Illegal E-cigarette Market as Revenue Falls Short
[3] Philippines BIR E-Cigarette Tax Revenue Reaches $17M, Covers Less Than 10-20% of Market
[4] Philippines BIR seizes over 500 illegal e-cigarette retailers with $3.09 million in tax liabilities
[5] Philippine Bureau of Internal Revenue struggles with declining tobacco revenue.
#Legislation#E-cigarettes#Asia#Philippines

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