MANILA – The Bureau of Internal Revenue (BIR) has overshot its February 2021 target for tobacco excise tax collections by 4.28 percent, collecting PHP17.57 billion mid-month after Japan Tobacco International (JTI) Philippines Inc. paid taxes of PHP10.94 billion, which is more than double the amount it paid in January.
In a report to Finance Secretary Carlos Dominguez III, BIR Deputy Commissioner Arnel Guballa said preliminary data showed that from Feb. 1 to 18, the bureau already collected PHP721.24 million more than its tobacco excise tax target of PHP16.85 billion for the month.
The February 2021 collection in tobacco excise taxes is also PHP9.20 billion or 109.85-percent more than the amount of PHP8.37 billion collected in the same period in 2020.
“Noticeably, we have a big increase in the collection of tobacco excises because JTI opened its plant in Lima, Batangas. So it’s in full operation, that’s why they increased their production. That’s also why we have quite a collection in tobacco for this month, sir,” Guballa said in his report during a recent Department of Finance (DOF) executive committee (Execom) meeting.
Cumulatively, the tobacco excise tax collection for Jan. 1 to Feb. 18 amounted to PHP29.1 billion, he said.
It is PHP12.33 billion or 73.53 percent more than the PHP16.77 billion collected for the January-February period of the previous year.
As of Feb. 18, Guballa said JTI Philippines overtook Philip Morris Fortune Tobacco Co. (PMFTC) as the top tobacco excise taxpayer, with JTI’s remittance of PHP10.94 billion accounting for 62 percent of the total collection of PHP17.57 billion for the Feb. 1-18 period.
JTI Philippines’ February tax payment is 108 percent more than the PHP5.25 billion it paid in January 2021, Guballa said.
In 2017, the DOF made history by collecting from cigarette manufacturer Mighty Corp. a tax settlement totaling PHP30 billion –the biggest sum on record raised by the government from a tax settlement– resulting from the Dominguez-ordered heightened joint campaign by the BIR and the Bureau of Customs (BOC) against tax cheats.
Forced to shut down its operations, Mighty sold its manufacturing and distribution assets to JTI Philippines. Tax collections from Mighty brands increased by an average of PHP2.5 billion a month since JTI took over Mighty’s operations.
Dominguez earlier expressed confidence the BIR would be able to overshoot its PHP2.08-trillion collection target this year as it faces the “great task” of raising as much revenues as possible to help fund the comprehensive government effort to defeat the Covid-19 pandemic and support the nation’s sustainable economic recovery.
He said the digitalization initiatives put in place by the BIR under the leadership of Commissioner Caesar Dulay, along with the bureau’s improved administrative systems, dedicated workforce and the cooperation of taxpayers, will enable the agency to achieve its 2021 collection goal. (PNA)