BIR missed 2018 collection goal despite new, higher taxes under TRAIN

MANILA, Philippines – Last year’s tax take of the Bureau of Internal Revenue (BIR) fell below target as it also failed to hit the programmed collections from the new or higher excise taxes slapped under the Tax Reform for Acceleration and Inclusion (TRAIN) Act.

During a House ways and means committee hearing Tuesday, BIR Assistant Commissioner Alfredo V. Misajon told legislators the country’s biggest revenue agency collected P1.962 trillion in taxes last year, up 10.15 percent from the P1.781 trillion in 2017.

However, the BIR’s actual collections fell short of its P2.044-trillion goal for 2018 by 4.01 percent, Misajon said.

The latest BIR data showed income tax collections of P982.47 billion were 4.14-percent lower than the program of P1.025 trillion.

Last year’s target was actually already lower than the P1.029 trillion in income taxes collected by the BIR in 2017, as TRAIN Law also gave tax relief and higher take-home pay to personal income taxpayers.

Meanwhile, collections of value-added tax (VAT) and excise taxes were also behind target by a bigger 17.8 percent and 12.67 percent, respectively.

Collections of percentage, donors, and other taxes nonetheless rose last year, boosted by reforms introduced under TRAIN Law, Misajon said.

For instance, Misajon noted of a surge in collections of documentary stamp tax (DST).

However, in the case of excise taxes, the BIR still posted shortfalls despite the higher or new rates under TRAIN Law.

In the case of petroleum excise taxes, Misajon blamed the below-target collections to loss of market share of the two local refineries run by Petron and Shell, a jump in importation of diesel and liquefied petroleum gas (LPG), as well as the delayed implementation of the fuel marking program.

Fuel marking, aimed at addressing oil smuggling, was supposed to start last year but will only be piloted in February before the full rollout in March.

As for sugar-sweetened beverages, the P16.46-billion deficit in excise tax collections was attributed by Misajon to the shift among manufacturers to using ordinary sugar levied a lower P6 per liter from high fructose corn syrup (HFCS) taxed double at P12 a liter.

Collections from automobile excise also posted a P1.48-billion shortfall as motor vehicle sales slowed down partly due to higher prices, Misajon said.

“There was spike in demand [for vehicles] in 2017 as buyers expected there will be [excise tax] increases in 2018,” he explained.

Excise tax collections from minerals also fell below goal due to an appeal for tax exemption lodged by Semirara Mining and Power Corp. as well as the suspension of several mine operations being reviewed by the government.

Misajon also blamed the lack of the implementing rules and regulations (IRR) until now of the new excise tax on cosmetic procedures, which he said was still pending approval by the Department of Finance (DOF).

For 2019, the BIR was tasked to collect P2.339 trillion, and Misajon expressed optimism that softer inflation and “improving economic conditions” would allow the agency to achieve this year’s target. /kga