BIR rethinks revenue goal after slower-than-expected GDP growth in Q1
FILE PHOTO: Bureau of Internal Revenue (BIR) Commissioner Romeo Lumagui Jr. PHOTO FROM BIR FACEBOOK PAGE
MANILA, Philippines — The receipts target of the Bureau of Internal Revenue (BIR) may be revised to take into account the slower-than-expected growth in Philippine gross domestic product during the first quarter.
BIR Commissioner Romeo Lumagui Jr. said that collections are so far “right on track” in hitting the agency’s goal of P3.2 trillion for the full year.
“Supposedly, the collection target is dependent on the economic growth of the country,” Lumagui said during the Kapihan sa Manila Bay news forum on Wednesday.
READ: Gov’t sets higher BIR, BOC revenue collection target for 2025
“Since the GDP growth is not going as projected, there should be a recalibration of the collection target, if we follow that [trend]” he added.
BIR collections typically account for about 80 percent of the national government’s yearly revenues.
BIR has seen strong growth so far in 2025
Latest data from the Bureau of the Treasury (BTr) show that the BIR raked in P420.5 billion in April. This marked a year-on-year increase of 11.1 percent. The bureau attributed this to higher intake from corporate income tax, value added tax and personal income tax.
In the first four months this year, BIR collected P1.1 trillion, a 14.5-percent increase compared with a year ago. The agency said that apart from simplifying tax filing via digitalization, it has been ramping up its crackdown on the use of fake receipts and illicit trade.
READ: BIR collects record P2.85 trillion tax in 2024
But in the first quarter, GDP grew by 5.4 percent. It missed both market expectations and the government’s 6 to 8 percent target band.
Policymakers typically peg the revenue target of the government to the projected performance of the economy. The assumption is that strong economic growth should translate to better sales for business and higher income for consumers. This, in turn, will result in bigger tax collections for the state.
Economy and Planning Secretary Arsenio Balisacan earlier said the upper-end of the Marcos administration’s target range might not be realistic anymore. He said this was due to uncertainties from the US trade war, which are hurting business confidence here and abroad.
