PMFTC

PMFTC Inc., the local affiliate of Philip Morris International (PMI), remained the country’s largest cigarette manufacturer in terms of sin tax contribution to government revenues, data from the Department of Finance (DOF) showed.

Based on the DOF’s analysis, the company behind the cigarette brand Marlboro and smoke-free device iQOS paid P42.04 billion in excise taxes in January to July 2021, equivalent to at least half of the Bureau Internal Revenue’s (BIR) sin tax haul during the period.

According to the DOF, PMFTC’s excise tax payments at end-July rose seven percent from P39.3 billion in the same period last year.

PMFTC is a joint venture company between PMI and Lucio Tan-led Fortune Tobacco Corp.

Finance Assistant Secretary Ma. Teresa Habitan, meanwhile, said the Japan Tobacco International (Philippines) Inc. (JTI) registered the highest annual excise tax increase in the first seven-months.

According to Habitan, JTI’s sin tax payments rose 73 percent to P38.8 billion from P22.4 billion in the previous year.

“It [JTI] remained at the second spot in terms of market share,” Habitan said in her report to Finance Secretary Carlos G. Dominguez III.

Total excise tax collections of the BIR from cigarettes increased by 31 percent to P83 billion in January to July compared with P63 billion in the same period last year.

Aside from PMFTC and JTI, the BIR collected P2.13 billion in excise tax from other cigarette makers, such as the Associated Anglo American Tobacco Corp. (AAATC) and Kenstand Philippines Inc. (KPI).

Habitan said that based on tax data, PMFTC’s market share of 50.7 percent remained higher than JTI’s share of 46.8 percent for the first seven months of 2021.

“However, it should be noted that JTI’s share for [this] period increased by 11.4 percentage points when compared to last year. This was due to JTI’s increased volume of 55.8 percent year-on-year while PMFTC’s reported volume declined by 3.8 percent,” Habitan said.

Based on the tax collections, JTI’s volume of removals was 498 million packs and 777 million packs for the first seven months of 2020 and 2021, respectively.

“This is equivalent to an increase of 278 million packs for the first seven months of the year,” Habitan said.

She said that of the P16.4-billion increase in taxes collected from JTI, P3.9 billion was the result of the increase in the tax rate while P12.5 billion was because of the increase in volume.

The tax rate on JTI’s tobacco products increased by 11.1 percent or P5 per pack, while volume increased by 55.8 percent or 278 million packs.

For PMFTC, the volume of removals for the first seven months of 2020 and of 2021 was 874 million packs and 841 million packs, respectively.

Habitan said this is equivalent to a decline of 33 million packs for the first seven months of the year.

Of the P2.7-billion increase in the tax collections from PMFTC, P4.2 billion was because of the increase in the tax rate, while there was a revenue loss of P1.5 billion from the decline in volume.

The tax rate for PMFTC’s products also increased by P5 per pack, while its volume declined by 3.8 percent or 33 million packs, Habitan said.

Habitan said the total combined volume of JTI and PMFTC as of July 2021 increased by 245 million packs or by 17.9 percent when compared during the same period last year, all of which came from JTI.


Source: Manila Bulletin (https://mb.com.ph/2021/09/20/pmftc-corners-half-of-govt-sin-tax-haul/?utm_source=rss&utm_medium=rss&utm_campaign=pmftc-corners-half-of-govt-sin-tax-haul)