Tax amnesty to boost 2019 collections

BIR Commissioner Caesar Dulay (INQUIRER FILE PHOTO / GEORGE SISON)

The upcoming amnesty programs on delinquencies and estate taxes will help the Bureau of Internal Revenue achieve its lower collection goal of P2.27 trillion for 2019, Internal Revenue Commissioner Caesar R. Dulay said Monday.

“We expect to have a growth rate of a double-digit figure—more than 10 percent because the increase in the goal for this year is about 14.8 percent. So we should try to hit that figure as much as possible. Hopefully we should go above P2 trillion this 2019,” Dulay told reporters.

The BIR collected P1.96 trillion in taxes last year, 4-percent below target.

Its 2019 collection goal was reduced from P2.33 trillion previously as President Duterte vetoed the provision on general amnesty from Republic Act No. 11213 or the Tax Amnesty Act of 2019, which would have raised P6.82 billion from unpaid internal revenue taxes, except customs and import duties, since 2017 and prior years.

Dulay was nonetheless hopeful that the amnesty on delinquencies and estate tax amnesty would allow the BIR to collect more this year.

The Department of Finance had estimated additional revenues from estate tax amnesty to reach P6.28 billion while the amnesty on delinquencies would generate a bigger P21.26 billion.

The Duterte administration’s comprehensive tax reform program is expected to add an average of P214.5 billion in revenues yearly over the medium term and bring the total revenue take above the P4-trillion mark by 2022.

Under the fiscal targets approved by the Cabinet-level, interagency Development Budget Coordination Committee (DBCC) on March 13, the government wanted to collect P3.15 trillion in tax and nontax revenues this year, up by a tenth from P2.85 trillion last year.

For 2019, the DBCC had said that the Tax Reform for Acceleration and Inclusion (TRAIN) Act and package 1B (minus the e-receipts program scheduled to be piloted next year) would generate P162.2 billion.

The revenue goal will rise to P3.57 trillion next year, P3.98 trillion in 2021 and P4.44 trillion in 2022.

In 2018, total revenues grew 15.2 percent and exceeded the target by 0.1 percent “due to higher tax collections following the TRAIN law and nontax revenues,” the Department of Budget and Management (DBM) said.

As such, the share of revenues to gross domestic product hit 16.4 percent last year and was seen attaining the same level this year. The government plans to further increase its revenue effort to 17.2 percent of GDP (gross domestic product) by 2022.

“The government aims to sustain this strong momentum of higher revenue collections and spending performance. Over the medium term, the comprehensive tax reform program is expected to generate an average of P214.5 billion in additional revenues a year from the implementation of the TRAIN law, the recently passed Estate Tax Amnesty Act and administrative improvements,” the DBM said.

Meanwhile, disbursements had been programmed to amount to P3.77 trillion this year, P4.21 trillion next year, P4.7 trillion in 2021 and P5.21 trillion in 2022 after expenditures jumped 20.7 percent to P3.41 trillion last year.

The DBM said actual government spending in 2018 surpassed the program by 1.1 percent amid “heavy public spending in infrastructures and social services.”

As such, the expenditure effort was projected to rise from 19.6 percent last year and this year to 20.2 percent in 2022.

Given above-target spending last year, the budget deficit breached the ceiling equivalent to 3 percent of GDP and reached P558.3 billion. —BEN O. DE VERA