The Bureau of Internal Revenue’s (BIR) excise tax collections for the first four months of the year fell below target amid the challenges brought by the illicit trade of cigarettes in the country.
BIR Commissioner Romeo Lumagui, on the sidelines of the Global Anti-Illicit Trade Summit held in Bonifacio Global City yesterday, said while the tax agency had a record-breaking total collection in January to April of this year, it fell short of its excise tax revenue goal.
“The shortfall for our total excise tax (collections) is around -20 percent. A large part of that shortfall is attributable to tobacco,” Lumagui told reporters.
The BIR chief did not mention the actual collections for the period, but data posted on the BIR website showed its total excise tax collection goal for the four-month period amounted to P112.37 billion.
During the panel discussion, Lumagui was asked which among the illicit goods are causing the most headache, to which he answered: “To be honest, for now it’s really tobacco. The revenue loss for tobacco is huge and also that’s one of the main reasons why we’re not attaining our collection target for excise taxes.”
“It’s really a huge problem, that’s why we’re very serious in our efforts in going after the illicit traders with respect to tobacco,” he said.
Lumagui is optimistic the tax agency will be able to recover from the shortfall in the coming months, as it continues its raids and the filing of cases versus those involved in illicit trade.
He is also seeking the cooperation of other entities, such as online platforms, to remove the illicit products being sold online.
“We’re coordinating with them, hopefully we come up with an agreement soon as to how to address the proliferation of illicit products in their platforms,” Lumagui said.
In a statement yesterday, Lumagui also reminded the public that the sale of cigarettes and vape products below the new floor price is illegal.
The BIR issued revenue memorandum circular 49-2023 last May 5 detailing the floor price of cigarettes, heated tobacco, vaporized nicotine and non-nicotine products.
“We have a new minimum price for tobacco products. For cigarettes, P114.60 per pack and P1,146 per ream. For heated tobacco products, P120.40 per pack. For vapor products, a pod of nicotine salt has the minimum price of P200 (two ml) and P354.97 (four ml), while a bottle of conventional freebase has the minimum price of P179.20 (10 ml) and P403.20 (30 ml),” Lumagui said.
“Any seller offering below these floor prices is not paying their proper taxes. They are illegal traders. Their warehouses and stores will be raided. The BIR will file criminal cases against these illegal tobacco and vape traders,” he added.
