BIR misses April collection goal

MANILA, Philippines – The Bureau of Internal Revenue (BIR) missed its revenue target of P100 billion for April despite the month being the tax-filing season, its top official said yesterday.

BIR Commissioner Sixto Esquivias IV said that due to the impact of the global financial crisis, the agency’s collections fell below the P100-billion goal.

“We missed the target,” he told reporters on the sidelines of the launch of the BIR’s One-Stop-Shop Taxpayer Service Counter project.

Although he declined to provide specific figures, Esquivias said revenues in April also fell below the P91 billion collected in the same month last year.

The BIR chief attributed the dismal collections to poor business conditions brought about the global financial turmoil.

Esquivias said that except for value-added tax (VAT) collections, revenues from other types of taxes dropped. These include income, excise and corporate income taxes. “VAT is what’s saving the day for the BIR,” he said.

He said the agency is already feeling the pinch of the tax exemptions granted to minimum wage earners as mandated by Minimum Wage Law which took effect last year and the reduction in the corporate income tax rate to 30 percent from 35 percent as mandated by the Reformed Value Added Tax Law of 2005.

According to the estimates made by the interagency Development Budget Coordination Committee (DBCC), the government expects to lose P26 billion in revenues this year from the implementation of the Minimum Wage Law.

DBCC data also showed that the government expects to lose P15 billion to P20 billion this year from the reduction in the corporate income tax rate to 30 percent.

Given these factors, Esquivias said it would be difficult to meet the agency’s revised collection goal of P850 billion for the whole year. The DBCC earlier revised the BIR’s 2009 revenue target from P865 billion.

However, Esquivias said it would still be difficult to meet the revised goal of P850 billion.

“It would be very tough. What we can do is to exert our best efforts,” he said.

He also said that it would be up to government economic managers to again revise downward the P850 billion, depending on the macroeconomic conditions.

Esquivias expressed hopes that the agency’s Oplan Kandado Program would improve the agency’s revenue stream.    

Under the program, business operations of non-compliant taxpayers will be suspended and their establishments will be temporarily closed if they will be found to have violated certain tax laws. The closure order shall only be lifted by the BIR when there has been subsequent filing or amendment of returns with the payment of the tax as well as penalties.

The BIR had already padlocked 10 business establishments nationwide found violating tax laws. The agency expects to raise P10 billion from the program through an expected increase in tax compliance.