P15B worth of 'sin' tax lost due to illegal trading in tobacco – study 

The government failed to collect more than P15 billion worth of 'sin' tax – excise tax collected from tobacco and alcohol products – since the Sin Tax Reform Law have been enacted last year.

 

This was according to the study made by Oxford Economics and International Tax and Investment Center as commissioned by Philip Morris Incorporated.

 

The study found that uncollected sin tax surge by 497 percent to P15.6 billion last year from P2.6 billion in 2012.

 

The study blamed illegal tobacco trade.

 

 

BIR investigating the matter

The study showed that legal domestic consumption of cigarettes dropped by 18.5 percent, while illicit domestic consumption increased by three-fold or 298 percent.

 

In particular, the Filipinos legally consumed 86.3 billion cigarettes in 2013 from 102.2 billion two years ago. Meanwhile, 19.1 billion cigarettes have been consumed illegally last year, higher compared with 6.4 billion in 2012.

 

Last year alone, total Philippine consumption of cigarettes reached 105.5 billion.

 

For her part, Commissioner Kim Henares told GMA News the Bureau of Internal Revenue is investigating the matter. 

 

"We have been investigating this, but this is merely a market study and estimate without any strong evidence that is admissible under a court of law," she said. 

 

In December 2012, President Benigno Aquino III signed into law the Sin Tax Reform Bill that seeks to raise excise taxes on alcohol and tobacco products in progressive annual increases. 

 

The law was tagged as a health measure as it aims to reduce the number of smokers in the country.

 

It was implemented on January 1, 2013. Price increases, according to the law, will continue until 2017. 

 

A recent study by the Social Weather Stations in June revealed that 45 percent of Filipino smokers have shifted to cheaper brands following the law's enactment, while 17 percentage points of young smokers between 18 and 24 started to give up the habit. – Rouchelle Dinglasan/VS, GMA News