THE BUREAU of Internal Revenue (BIR) — which contributes about three-fourths of total government tax revenues — grew collections by a tenth last year from 2017, although it fell short of its target by four percent, according to data released at a hearing on Tuesday of the House of Representatives Ways and Means committee.
The bureau missed its P2.044-trillion full-year collection target for 2018 by 4.01% at P1.961 trillion, even as the tax take increased by 10.15% from 2017’s P1.781 trillion.
BIR data showed both income tax and value-added tax (VAT) collections decreased and fell short of targets, and that while excise tax take increased from 2017, it fell short of the 2018 goal. Republic Act No. 10963, or the first of up to five planned tax reform packages which took effect a year ago, slashed personal income tax rates and removed a number of VAT exemptions but either added or increased taxes on a host of other items.
BIR data showed income tax take, which made up half of the bureau’s 2018 collections, fell 4.49% year-on-year at P982.47 billion and 4.14% short of a P1.025-trillion target, while VAT collections slipped 1.91% to P358.27 billion and fell 17.8% short of a P435.88-billion goal.
And while excise tax collections increased by 38.73% to P290.64 billion, they still missed a P332.8-billion goal by 12.67%. “We analyzed the causes for underperformance with regards the excise tax on petroleum. We saw there was an erosion in excise tax collection from locally produced petroleum products due to loss of market share of two of our big oil players, namely: Petron (Corp.) and Pilipinas Shell (Petroleum Corp.),” BIR Assistant Commissioner Alfredo V. Misajon told lawmakers, adding that non-implementation of fuel marking designed to counter smuggling and drink producers’ shift to locally produced sugar from high-fructose corn syrup due to the latter’s higher excise tax under RA 10963 also weighed on collections.
Percentage and other taxes made up for these drops and shortfalls.
“Fuel marking projects with a goal of P10 billion included in our goal for petroleum did not materialize because the program was not implemented,” Mr. Misajon explained.
Turning to lower VAT collections, he cited “reported decreases in revenues… from the sale of goods and services because of the lingering inflation… for quite sometime and of course because of the deterioration of the exchange rate of the Philippine peso.”
Percentage tax collections surged by 48.74% to P113.93 billion and topped a P97.69-billion goal by 16.63%, while other taxes more than doubled to P216.21 billion and exceeded a P152.26-billion target by 42%. Under “other taxes”, however, estate tax take — which the Finance department has long described as a category that has constantly fallen far short of potential collection — topped a P2.38-billion target by 53.12% at P3.65 billion, even as this was 27% less than 2017’s P5 billion, while donors tax take increased by 40% to P3.5 billion, exceeding a P2.23-billion goal by 57.08%.
The BIR has been entrusted with a P3.018-trillion collection target for this year. — Charmaine A. Tadalan