BIR to collect PHP 360B in excise taxes in 2026

The Bureau of Internal Revenue (BIR) is looking to increase excise tax collections by 9% in 2026, mainly driven by tobacco products.

In the 2026 Budget of Expenditures and Sources of Financing (BESF), the government is set to collect PHP 359.65 billion in excise taxes in selected goods, 9.35% higher than PHP 328.9 billion for this year.

The bulk or PHP 166.57 billion in excise taxes will be collected from tobacco products, even as the government sees significant losses due to illicit trade.

The BIR expects to collect PHP 132.07 billion in excise taxes from alcohol products, and PHP 42.09 billion from sugar-sweetened beverages.

It is also targeting to collect excise taxes from mining (PHP 11.85 billion) and automobiles (PHP 6.54 billion).

Notably, the government took out the projected revenue from the proposed tax on single-use plastics, as the measure has yet to be approved by Congress.

The Philippines is bleeding USD 2 billion (PHP 114 billion) in lost revenues due to the proliferation of illicit tobacco trade in the country, a consultancy firm said at a forum last week.

BIR Commissioner Romeo D. Lumagui, Jr. earlier said the government loses billions of revenues due to illicit tobacco trade coupled with Health department’s campaign to discourage tobacco use.

Mr. Lumagui also said illicit tobacco manufacturers are using economic zones to avoid paying excise taxes even though the products are sold in the Philippines.

“If it’s meant for export and not for local consumption, there’s no excise tax. It’s being manufactured here in the ecozones. That’s what they’re trying to show — that the license they’re getting is for exporting all these products,” he told reporters during a tobacco forum on Aug. 5.

In the first half, excise taxes on tobacco went up 34.16% to PHP 58.97 billion in the January-to-June period, after several months of continued contraction. — ARAI