MANILA, Philippines – The Bureau of Internal Revenue (BIR) is bracing for possibly lower tax collections due to slower sales being reported by firms following last month’s eruption of Taal Volcano as well as the COVID-19 outbreak.
Internal Revenue Deputy Commissioner Arnel Guballa last Friday said that the country’s biggest tax-collection agency was already culling reports from regional directors and its large taxpayers service to determine the impact on collections of the recent calamities.
But as early as now, Guballa said some large taxpayers are already sending feelers to the BIR, warning the agency not to expect “good” voluntary payments in the coming month as this month’s sales taxes will be remitted in March.
Guballa said a number of firms had told the BIR that their businesses in general and consumer demand in particular slowed due to Taal Volcano’s eruption and the COVID-19 outbreak.
In the case of hotels, some reported that only about 12 percent of their rooms are occupied, Guballa noted.
While some retailers offered “sale” or other promotional offers, these were not enough to offset slow sales at the start of the year, Guballa added.
Companies belonging to the large taxpayers category were supposed to contribute to the bulk or P1.67 trillion out of the BIR’s P2.58-trillion collection target for 2020, Guballa said.
Under BIR rules, large taxpayers included corporations with authorized capitalization of at least P300 million registered with the Securities and Exchange Commission; multinational enterprises with authorized capitalization or assigned capital of at least P300 million; publicly-listed corporations; universal, commercial and foreign banks; taxpayers with an authorized capitalization of at least P100 million belonging to the banking, insurance, petroleum, telecommunications, utilities, alcohol and tobacco industries; and corporate taxpayers engaged in production of metallic minerals.
While Guballa said the overall impact on tax-collection was not expected to be too significant, the BIR is already looking for possible remedies or alternative ways to raise revenues and cope with the aftermath of the volcanic eruption and COVID-19 consequences.
At present, Guballa said the BIR sees no need to need to ask for a reduction in this year’s revenue goal, as it remains to be seen if the COVID-19 outbreak would be prolonged.
In January, the BIR temporarily suspended tax filing and payments in Batangas province to give relief to victims of Taal Volcano’s eruption.
Internal Revenue Commissioner Caesar R. Dulay said the BIR was firming up a tax amnesty program for Taal victims.