BIR collection up 5% in April

MANILA, Philippines - Tax collections of the Bureau of Internal Revenue (BIR) rose nearly five percent in April but still fell short of the   target for the month due to low growth rates of taxes paid by the business sector. 

In a report, the BIR said total tax revenues reached P156.1 billion in April, up five percent from last year’s  P7.12 billion. 

The amount, however, was 11.55 percent lower than the agency’s goal for the month of P176.5 billion.

Despite falling below the target, tax collections have so far increased every month on the back of the government’s intensified campaign against tax evasion.

Collections from BIR operations rose 5.05 percent to P153  billion. 

On the other hand, non-BIR operations which refer to the taxes collected by the state from government securities issued by the Bureau of Treasury amounted to P3.12 billion, down 6.76 percent from the previous year.

The BIR attributed the shortfall to slow growth rate of taxes paid by those belonging to the Large Taxpayers Service and corporate taxpayers in the National Capital Region.

Large corporations covered by the LTS are those that meet certain criteria such as at least P1 million in annual income tax and at least P1 million in annual excise tax.

BIR commissioner Kim Henares said the tax incentives given to certain industries continue to weigh down the government’s tax effort, a closely watched indicator of a country’s credit worthiness.

Tax effort is the ratio between the government’s collection of taxes and import duties and the economy’s gross domestic product.

While the gross revenues of big corporations have grown, these did not translate to tax revenues for the government because of the tax perks they enjoy.

Henares said tax incentives given to certain industries must be removed to boost government revenues.

To address this, she pushed for the immediate passage of the controversial Fiscal Incentive Rationalization bill, which has been pending in Congress for 16 years.

The bill has met strong opposition from various parties as it seeks to remove the tax and duty-free incentives of several industries.

Despite the shortfall, Henares said there is still a long way to go and that the BIR has still a chance to further improve its collections in the next eight months as it continues to monitor tax compliance of corporations. 

“The BIR is embarking on an intensified audit of the books of taxpayers that show a drop in their tax payments despite an increase in their revenues,” Henares said.