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THE
government is perplexed as to why excise-tax collection
from cigarettes and alcohol products can swing so
wildly, throwing a monkey wrench into revenue planning:
exceeding the goal one year and hitting the nadir the
next, prompting Finance Secretary Margarito Teves to
seek help from the World Bank and the International
Monetary Fund (IMF) to understand it better.
The
peaks and valleys move independently of whether or not
the economy expanded or hitting the doldrums, making
fiscal planning difficult.
“We have
sought the assistance of both the World Bank and the IMF
to help us understand it better. While I was in
Davos,
Switzerland,
I also communicated the intent to the new IMF chief,
Dominique Strauss-Kahn,” Teves said on Monday.
World
Bank country representative in Manila Bert Hofman and
IMF resident representative Reza Baqr were both told of
the planned request, he added.
Teves
had just reported on the fiscal sector’s performance
last year when the budget deficit proved lower than
target of P63 billion at only P9.4 billion.
Finance
Undersecretary Gil Beltran acknowledged that collecting
excise tax, particularly from tobacco and alcohol
products, has never been consistent.
“We
don’t understand why the outturns are inconsistent with
developments. The movements do not even relate to GDP on
certain years,” he said.
Latest
data on tobacco excise show collection excess of P745
billion in the first eight months last year to P17.3
billion against program of P16.5 billion.
But
excise tax on alcohol products was down by P147 million
for the period, to P10.4 billion versus the goal of
P10.587 billion.
“We like
to think that people are drinking less but are actually
smoking more and it doesn’t make sense,” Beltran said.
Data
show total excise collection, which includes the tax on
petroleum, exceeding the eight-month target in 2007 to
P36.673 billion.
Teves
said the broad aim was to try to limit the huge amount
of excise tax escaping the tax net each year because the
system is believed too unwieldy and inefficient.
He said
the excise tax on tobacco, for instance, consists of
four different tax rates corresponding to four different
cigarette classification.
“We plan
to bring it down to just one tax rate for everyone, or
two at the most,” Teves said.
Beltran
corroborated the current excise system as “too messy”
for purposes of quick, efficient collection of excise
tax.
The
inefficiency of the system is suspected as the main
source of uncollected excise tax that should have been
collected as a matter of course, and without the public
tax collectors breaking into sweat just making their
collection goals, according to Beltran. |
