Gov’t readying lifesavers for firms hurt by COVID-19, says DOF

As tax collections decline due to firms’ slower sales while shipments of imported goods from China and elsewhere fall amid the COVID-19 outbreak, the government plans to grant temporarily relief to affected companies.

“What we’re doing now is evaluating what will be most affected by COVID-19. We are looking at ways to help these companies—we’re looking at who are those importing the most from China,” Finance Undersecretary Antonette C. Tionko said.

In the case of the tourism sector, which had enjoyed a surge of inbound Chinese tourists in recent years, Tionko said the government also wanted to help airlines and hotels reeling from COVID-19’s economic impact.

Tionko said in an interview that the government was thinking of waiving fees—for example, landing fees in the case of airlines.

While the government had yet to firm up relief for affected firms, Tionko said all agencies will be involved in this initiative.

Due to COVID-19, “we’re seeing already a lower collection of the BOC [Bureau of Customs] because of the slowdown of our importations from China,” Tionko said.

Citing preliminary BOC data, Tionko said the volume of imported goods from China dropped 44 percent year-on-year in February. China was the Philippines’ top source of imports—including capital goods, raw materials and consumer products—in 2019.

Tionko said overall import volume last February declined 22 percent, even as the BOC’s actual collections of import duties and other taxes “did not go down much because this was offset by taxes on importations of oil.”

Also, Tionko said initial estimates showed that the Bureau of Internal Revenue’s (BIR) tax take was lower last month, “but we can recover” to hit the target collections for 2020.

BIR officials had received reports that large taxpaying firms’ sales slowed as consumers avoided going out to prevent COVID-19 infection.

For 2020, the BIR had been tasked with collecting a record P2.58 trillion, while the BOC’s collections must reach P731 billion.

Edited by TSB