MANILA, Philippines?The Bureau of Internal Revenue is preparing for the possible drop in tax collection in the second half as several laws providing tax relief come into effect.

BIR Commissioner Joel Tan-Torres said that while the tax bureau has been able to consistently meet its monthly collection targets since December last year, it expects a tough second half given the full impact of recently passed laws granting tax exemptions.

These include the Real Estate Investment Trust (REIT) law, the Personal Equity and Retirement Act (PERA) and the law exempting senior citizens from the value-added tax (VAT).

?It [meeting the tax collection goal for the second half] will be a challenge because there are a lot of tax exemptions and the amounts are expected to be big,? Tan-Torres said.

REIT law provides guidelines on the creation of REIT firms, which collect a pool of money to be invested in real estate projects. The government has granted tax discounts to REIT firms to encourage investments in real estate.

The PERA, meanwhile, encourages individuals to save for their retirement by granting tax incentives to earnings from money placed in ?PERA accounts.?

These include bank deposits to be withdrawn at retirement age.

Meanwhile, the VAT law on senior citizens is expected to take effect once the implementing rules and regulations are issued.

Tan-Torres said the economy should accelerate its growth so that taxes on income of individuals and businesses would compensate for the potential revenue losses arising from the tax exemptions.

For the second half, the BIR is tasked to collect P440.2 billion. For the entire year, it is directed to generate P830.4 billion.