PHL needs a more ‘dynamic’ excise tax regime — solon 

A PHILIPPINE lawmaker said there is a lot of room for the government to improve income from excise taxes, particularly for so-called sin products and luxury goods.   

We have to keep evolving our excise tax regime because consumption patterns tend to change,House Ways and Means Chairman and Albay Rep. Jose Ma. Clemente S. Salceda said in a statement.   

Smoking used to be our main concern. Now there is a perceptible shift to vaping. Even oil consumption patterns will eventually change. So, you need a dynamic excise tax regime,he added.   

He noted that excise taxesor the levy imposed on the production, sale or consumption of a commodity comprise just between 3.2% to 3.6% of gross domestic product.   

That’s barely one-fifth of total revenue collection,he said.  

He said while efforts are underway to address sources of tax leakage, improvements in terms of tax administration are not enough.    

We continue to have some of the cheapest alcohol and tobacco in the region. We impose no excise taxes on pick-up trucks. Our luxury goods taxes cover a very narrow set of luxuries’… There is plenty of room to discuss excise taxes,Mr. Salceda said.   

And when I receive an official request from the DoF (Department of Finance) to discuss certain proposals, and draft administration bill on these proposals, we will take them up.”  

The DoF, on the other hand, estimates that recent laws relating to sin taxes have improved collection by 23% to P65.3 billion in 2022. Beatriz Marie D. Cruz