Gov’t revenues jump 10.8% to P1.59 trillion as of May ’23
MANILA, Philippines — The national government’s revenues for the five months ending May jumped by 10.8 percent, but the need to improve tax collection efficiency persists, according to Finance Secretary Benjamin Diokno.
Revenues in the first five months reached P1.59 trillion from P1.44 trillion in the same period last year.
Tax intake alone grew by 9.7 percent to P1.4 trillion from P1.29 trillion.
In a briefing on Friday, Diokno told reporters that the collection of the value-added tax (VAT) in particular continued to be much less than the potential revenue for the VAT.
One reason is the proliferation of fake receipts, on which the Bureau of Internal Revenue (BIR) is cracking down.
Last week, BIR Commissioner Romeo Lumagui Jr. himself filed at the Department of Justice criminal cases against identified buyers or clients of a fake receipts syndicate.
Lumagui said the syndicate registers “ghost” companies whose sole business purpose is to sell original receipts so their buyers could illegally reduce their tax liabilities.
The BIR estimated that fake receipts had robbed the government of P17.9 billion in tax revenues.
Earlier, Diokno said the government was reviewing VAT exemptions to further broaden the tax base and enhance collection efficiency.
He explained that while the Philippines has the highest VAT rate at 12 percent compared to neighboring countries, VAT collection is the most inefficient at only 40 percent of the potential total VAT revenues.
Citing a World Bank study done in 2018, the finance chief said forgone revenues from VAT exemptions and incentives could reach as high as P539 billion a year.
The Tax Code listed 29 transactions exempt from VAT to mitigate the VAT burden. These items are mostly social goods and services such as agricultural and marine food products in their original state, education, health services, and financial services.
Diokno said the government was studying how the country can further broaden the tax base and look into areas that have too many exemptions.