RVAT generates P76.9B in net revenues for 2006

The Department of Finance (DOF) reported yesterday that its implementation of the value-added tax reforms (RVAT) had been largely successful in 2006, outperforming the target collection by P1.1 billion.

The DOF said yesterday that the RVAT generated P76.9 billion in net revenues in 2006, exceeding the target of P75.8 billion by P1.1 billion.

According to Finance Undersecretary Gil Beltran, the Bureau of Internal Revenue (BIR) collected a total of P21.6 billion, putting the bureau ahead of its RVAT collection target by P1.2 billion.

On the other hand, Beltran said the Bureau of Customs collected a total of P55.2 billion for the whole year, falling P183-million short of its target because of the appreciation of the peso.

According to Beltran, BIR’s RVAT collection was boosted by lower input VAT claims of downstream sectors. He said input VAT claims actually declined by P7.3 billion.

On the other hand, Beltran said the BIR benefited from VAT withholding on government purchases which generated an additional amount of P5 billion.

Beltran said there was also a decline in the impact of the measures intended to mitigate the effects of the increase in the VAT rate. He said foregone revenues from these mitigating measures declined by P4.8 billion.

Beltran said VAT collections would have been higher if not for the revenue impact of the decline in the volume of domestic oil production which led to a decline in the VAT on petroleum products.

Beltran said the DOF also saw lower yields from input VAT cap and crediting, amounting to P13.2 billion and P4.3 billion, respectively.

Beltran said the RVAT has generated P81.3 billion since November 2005 when it took effect.

On the whole, Beltran said the RVAT boosted total VAT collections to P268.7 billion in 2006, a 71.5 percent increase from P156.7 billion in 2005. Of the total, BIR collected P139.9 billion while BOC collected P128.8 billion.