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Business
Shares of excise, sin tax to GDP declining

The share of excise tax collections to gross domestic product (GDP) is consistently declining, according to a report published by the National Statistical Coordination Board (NSCB).

In a report titled “What is so sinful about the sin tax?,” NSCB Secretary General Jose Ramon Albert said that data from the Bureau of Internal Revenue (BIR) and NSCB showed that from 1998 to 2010, the share of excise tax collected to GDP consistently went down from 2.1 percent to 0.7 percent.

GDP is the amount of final goods and services produced in the country within a year, while excise tax is a tax imposed on goods manufactured or produced in the Philippines for domestic sale or consumption or any other disposition. It is also imposed on products that are imported.

Moreover, BIR data also showed that of the total revenue collection of the country in 2002 to 2010, which amounted from P394 billion to P822 billion, the share of excise tax declined from 14.4 percent to 8.2 percent.

Albert also said that the declining ratio of excise tax may be attributed to the generally decreasing share of sin taxes in the revenues collected. A sin tax is an excise tax imposed on selective products such as liquor and cigarettes, and activities such as gambling, which are considered by society as vices.

BIR data showed that the share of tax collected from alcohol products went down to from 3.3 percent in 2002 to 2.6 percent in 2010, while the share of tax collected from tobacco products also went down from 5.1 percent in 2002 to 3.9 percent in 2010.

Tobacco facts
Meanwhile, Albert also cited data from Centers for Disease Control and Prevention, 2009 Global Adult Tobacco Survey Philippines Fact Sheet, which showed that 28 percent, or 17.3 million Filipinos aged 15 years and older, were current tobacco smokers.

The NSCB chief noted that that of the 17.3 million smokers, 14.6 million were males while 2.8 million were females.

“And take note . . . it was recorded that the average number of cigarettes consumed per day by daily cigarette smokers is 10.6!,” he added.

On the other hand, using data from the 2006 and 2009 Family Income and Expenditures Surveys (FIES) of the National Statistics Office (NSO), Albert said that Filipinos spend about 0.8 percent of their total expenditure on tobacco.

The NSCB chief noted that Filipinos belonging to the bottom 30 percent of the population posted an even higher percentage, with 1.6 percent of their total expenditure spent on tobacco. Furthermore, data form 2008 National Nutrition Survey of the Food and Nutrition Research Institute showed that 26.9 percent of Filipinos aged 20 years and over are current alcohol drinkers.

“Among men, 47.5 percent were registered to be drinkers, this is five times more than their women counterparts, which posted 9.8 percent,” Albert said, adding that 2006 and 2009 FIES showed that Filipinos spend about 0.7 percent of their total expenditure on alcohol.

And similar to tobacco, Filipinos belonging to the bottom 30 percent of the population posted an even higher percentage, with 1.1 percent of their total expenditure going to alcohol, he added.

Refer http://www.manilatimes.net/index.php/business/top-business-news/36389-shares-of-excise-sin-tax-to-gdp-declining

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Shares of excise, sin tax to GDP declining


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