BIR 2020 tax goal slashed to P2.26T as COVID-19 took toll on businesses

MANILA, Philippines – The Bureau of Internal Revenue’s (BIR) 2020 tax-collection target has been downscaled to P2.26 trillion in consideration of the COVID-19 pandemic’s impact on the economy.

Revenue Memorandum Order (RMO) No. 12-2020 issued by Internal Revenue Commissioner Caesar R. Dulay on April 27 noted that the Cabinet-level Development Budget Coordination Committee (DBCC) last month reduced the BIR’s collection goal from P2.576 billion previously.

“The [BIR’s] revised collection target comprises the BIR operations target of P2.206 billion and P54.584 billion for non-BIR operations,” Dulay said.

BIR operations included the collection of taxes slapped on individual and corporate net income and profits, value-added tax (VAT), excise taxes, and percentage taxes.

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

“The revised BIR operations target is lower by P289.296 billion or 11.59 percent compared to the initial goal of P2.495 trillion. The decrease in BIR operations collection target of 11.59 percent was uniformly applied to all implementing offices,” Dulay added.

BIR Deputy Commissioner Arnel S.D. Guballa told the Inquirer that the BIR’s adjusted 2020 target took into consideration the government’s assumption that COVID-19’s economic impact would be short term.

Asked if the downscaled goal was more achievable, Guballa replied that “it remains to be seen how the enhanced community quarantine and general community quarantine will last; otherwise, business is much affected.”

The BIR’s adjusted 2020 target showed collections in April were expected to decline to only P74.5 billion from over P100 billion each during the months of January to March, before jumping to P320.5 billion in May.

In the past, BIR collections peaked in April as the Tax Code mandated the deadline of filing and payment of the previous year’s income tax returns (ITRs) on or before April 15.

But the BIR had already twice extended tax deadlines, including of 2019 ITRs in consideration of the prolonged lockdown period.

Last week, Guballa told the Inquirer that the BIR was currently “doing the necessary adjustments to align with the IATF’s [Inter-Agency Task Force on Emerging Infectious Diseases] pronouncement,” referring to the further extension until May 15 of the ECQ in various parts of the country on top of GCQ imposed elsewhere.

Over the weekend, the Department of Finance (DOF) reported that the BIR collected P480.64 billion from Jan. 1 to April 17, down 32 percent year-on-year and 45.3-percent lower than the target.

During the period April 1-17, the BIR collected only P25.01 billion.

Via ad referendum, the DBCC had projected this year’s combined tax and non-tax revenues amounting to P3.173 trillion, barely up from P3.138 trillion last year.

On the other hand, expenditures on public goods and services were expected to climb to P4.163 trillion this year from P3.798 trillion last year, resulting in a wider budget deficit of P990.1 billion, equivalent to 5.3 percent of gross domestic product (GDP).

AC