BIR tax collection contracted, below official target for July
The Bureau of Internal Revenue’s (BIR) tax take slid by 1 percent year-on-year in July to P118.2 billion, which is also below the target for that month.
The latest data released by the Department of Finance (DOF) on Monday showed that the amount collected by the country’s biggest tax-collection agency last July was lower than the P119.9-billion take a year ago.
The July figure also fell short of the P146.3-billion goal by almost a fifth.
The BIR failed to hit any of its monthly targets during the first seven months.
At end-July, the BIR’s collections amounted to P824.1 billion, up 8 percent from P763.2 billion during the first seven months of last year.
The end-July haul, however, was 14 percent lower than the P958.4-billion cumulative target for the seven-month period.
For 2015, the BIR should collect P1.674 trillion in taxes, 25.4 percent more than the P1.335-trillion actual collection in 2014.
The BIR had twice slashed its tax take goal for 2015—originally at P1.721 trillion—due to recently approved revenue-eroding measures.
In January, the BIR cut this year’s target to P1.704 trillion, citing the P16.9 billion in foregone revenues from the expanded exemption on workers’ de minimis benefits. Last February, the BIR again lowered its goal as the law that lifted to P82,000 the tax-exemption cap on 13th-month pay and other bonuses was expected to result into up to P30 billion in foregone revenues.
The BIR’s collections for 2016 had been programmed by the DBCC to grow by 21 percent to P2.026 trillion, the first time projected to breach the P2-trillion mark.
Next year’s BIR collection target will be equivalent to 13.3 percent of gross domestic product.
Meanwhile, the BIR urged Philippine financial institutions to “take the necessary steps to prepare for the full implementation of the terms of the intergovernmental agreement (IGA) [on the Foreign Account Tax Compliance Act] and the concomitant submission of information on reportable accounts beginning the second quarter of 2016.”
Last July, the Philippine and US governments signed the reciprocal IGA that would implement provisions of the US law.
“Pending entry into force of the IGA, the concerned Philippine financial institutions are hereby advised that reporting will not take place on Sept. 30,” BIR Commissioner Kim S. Jacinto-Henares said in an advisory.
Henares had said that only after the IGA is ratified by the Philippine Senate can the BIR completely enforce it.
“The innovation that the IGA introduces is the automatic reporting of financial accounts maintained by US persons in Philippine financial institutions to the BIR, which, in turn, will annually transmit the information to the US Internal Revenue Service (IRS). The reciprocal nature of the IGA provides the equivalent benefit to the Philippines as the IRS will routinely provide the BIR reports on financial accounts maintained by Philippine residents in US financial institutions,” the DOF earlier explained. Ben O. de Vera
