BIR 2016 goal: Higher income tax collections

MANILA, Philippines – Income taxes will account for the bulk of the more than P2 trillion the Bureau of Internal Revenue (BIR) targets to collect this year.

Under Revenue Memorandum Order 2-2016 released last week, the BIR is tasked to collect P2.026 trillion this year, up 21 percent from last year’s goal of P1.674 trillion.

Broken down by tax type, income taxes corner 62 percent of the goal, projected to reach P1.192 trillion in 2016. Last year, it accounted for about 60 percent of the total target.

“The total goal allocation, by major tax type, was distributed proportionately among the implementing offices, based on their share to total estimated 2015 collections on BIR operations,” the memorandum stated.

Last year, income taxes became a hot topic after allies of President Aquino in Congress pushed bills to lower the tax rates currently going up to 32 percent annually.

The proposals did not prosper however, after Aquino opposed them over an estimated P30 billion in yearly revenue losses that would come as a consequence.

Under the current memorandum, the BIR said revenue targets were set based on economic assumptions for this year and collection performance last year.

“The total monthly goal collection, by major tax type, of the implementing offices was based on the monthly trends of estimated (collections) in 2015,” it said.

Other sources of BIR revenues and their corresponding amounts are value-added tax (P405.11 billion), excise tax (P170.72 billion), percentage tax (P82.9 billion), and other taxes (P123.54 billion).

By office, the BIR’s Large Taxpayers Service – which includes the top 500 corporations – must collect P1.23 trillion, while the agency’s regional offices is tasked to garner P739.52 billion.