BIR: Revenue collection goal won’t be hit
Bureau of Internal Revenue (BIR) Commissioner Kim S. Jacinto-Henares admitted to having a “very ambitious” revenue collection goal.
During a hearing on the proposed 2016 budget of the Department of Finance (DOF) on Tuesday, Henares said achieving that target is already unlikely even with the current tax system.
Henares and other finance officials continued to deflect criticisms from senators for broadly opposing moves to slash income tax rates.
“We have a very ambitious goal. I don’t think we will reach [that target],” the BIR chief said.
During the hearing, senators Ralph Recto and Sonny Angara pointed out the need to ease the income tax burden on compensation earners.
Recto argued that the P30 billion in foregone revenues projected from adjusting income tax rate brackets to inflation are just a small portion of the over P2 trillion in total target collections of the BIR, Bureau of Customs (BOC) and other revenue agencies for this year and next year.
Henares pointed out that collecting such a huge amount was just a “presumption.”
Finance Secretary Cesar V. Purisima reiterated the DOF is pushing for a comprehensive, balanced tax reform package. “We’ve always said that we are open to holistic, not piecemeal tax reform,” he said.
On Monday, President Aquino himself said he was against lowering income tax rates. He also bucked calls to expand or add new taxes on consumption, such as the value-added tax, to compensate for losses in case the income tax rate is lowered.
“If we lower the income tax, revenues will go down, the deficit will grow,” he said in Filipino.
For 2015, the BIR should collect P1.674 trillion in taxes, 25.4-percent more than the P1.335-trillion actual collection last year. The BIR failed to reach its target 2014 collection of P1.456 trillion.
The latest DOF data showed the amount collected by the country’s biggest tax-collection agency last July slid by 1 percent year-on-year to P118.2 billion as well as fell short of the P146.3-billion goal by almost a fifth.
The BIR’s collections for 2016 had been programmed by the Cabinet-level, interagency Development Budget Coordination Committee to further grow by 21 percent to P2.026 trillion.
During the hearing, Recto said he cannot understand why the Aquino administration opposes reduction of income taxes that will benefit about five million Filipinos while the DOF is seeking an additional P30 billion in its 2016 budget to subsidize equity infusion into state-run Development Bank of the Philippines (DBP) and Land Bank of the Philippines.
The proposed budget of the DOF for next year more than tripled to P55.3 billion from just P16.9 billion in actual appropriations this year.
The 2016 proposed DOF budget covers P20 billion for Land Bank and P10 billion for DBP to improve their compliance with the Basel 3 requirement of the Bangko Sentral ng Pilipinas in raising the capital adequacy ratio.
Angara said it would be difficult to approve such a huge amount in budgetary support for state-run banks.
The Budget of Expenditures and Sources of Financing document for fiscal year 2016 showed that the proposed total budgetary support for government-owned and -controlled corporations next year would increase to P127.1 billion from P74 billion this year.
