Home Editors' Picks Tax collection continues to slump in May — DoF
Tax collection continues to slump in May — DoF
THE government’s tax haul slid by 50% in May as the deadline for income tax payments was once again deferred due to the extended lockdown.
Finance Secretary Carlos G. Dominguez III on Tuesday said the country’s two biggest revenue-generating agencies, Bureau of Internal Revenue (BIR) and Bureau of Customs (BoC), continued to see lower tax collections in May.
“The preliminary collections for the month of May for BIR and BoC are around 50% lower than last year’s and that again is because of the shutdown (of the economy). We will announce as soon as we have the firm figures for May as well as the cumulative figures from January to May but believe me, they are not very pretty,” Mr. Dominguez said in an online briefing.
Metro Manila remained under enhanced community quarantine throughout May, while most parts of the country saw a more relaxed lockdown.
Mr. Dominguez attributed the lower tax collections to the postponement of the 2019 income tax deadline, which was originally April 15.
The Department of Finance (DoF) chief said government revenues are expected to “catch up” by the end of the month, as the deadline for filing and payment of annual income tax returns was on June 15.
“As we announced a few weeks ago, (May collections) are quite bad, mainly because our tax deadlines have been postponed. However, we expect to catch up by the end of the deadline which is the end of this month, so we expect to collect the taxes that were due from income last year. They were supposed to be paid in April and we gave them time to file so that’s why compared to last year, our collections are quite low,” Mr. Dominguez said.
Revenues in May were still down despite the temporary 10% tariff on imported crude oil and refined petroleum products under Executive Order (EO) 113 issued on May 2.
In a document sent by the Finance chief to reporters on Tuesday, the increase in duties and VAT on all imported oil products covered under the EO generated P1.214 billion in additional revenues through mid-June.
Additional collections from liquefied petroleum gas (LPG) during the period reached P283.06 million, while those from naphtha totaled P3,325.
The Energy department last month said the oil import tariff hike could raise P6.78 billion in additional revenues for the government this year.
Preliminary data from the BoC showed imported oil products declined by 72.5% to 437.89 million kilograms (kg) in May from 1.592 billion kg reported in the same month last year.
BoC’s overall collections in May dropped 48.4% to P30.01 billion from P58.17 billion a year ago, and fell 10% short of the P33.33-billion target for the month.
This brought year-to-date collections to P210.18 billion, down 16.5% from P251.71 billion in May 2019 and failed to meet the P213.5-billion target.
The Development Budget Coordination Committee (DBCC) on May 12 slashed BoC’s collection target for this year to P541.703 billion from the P730-billion target set before the coronavirus pandemic.
For the BIR, latest available data showed its collection goal was also lowered to P2.26 trillion from the previous target of P2.576 trillion.
DBCC estimated government revenues will settle at P2.929 trillion this year, lower than the previously estimated of P3.17 trillion as the economy is expected to contract by 2-3.4%. — Beatrice M. Laforga