By Beatrice M. Laforga
THE government expects tax collections to plunge this month, as oil prices and demand plummeted and income tax payment deadlines were deferred due to the ongoing Luzon-wide lockdown.
Finance Secretary Carlos G. Dominguez III on Tuesday warned that collections by the Bureaus of Internal Revenue (BIR) and Customs (BoC) will be “very bad” this month.
“Will issue soon the preliminary figures up to 4/15 (April 15). As you can imagine they will be very bad,” Mr. Dominguez told reporters via Viber, referring to the collections of the two agencies.
National Treasurer Rosalia V. de Leon said collections are smaller this month compared to April 2019, based on the collections BoC and BIR remitted to the national treasury since April 1.
“Lower than last year,” Ms. De Leon said in a Viber message on Tuesday.
Data from the Bureau of the Treasury (BTr) showed tax revenues stood at P288.9 billion in April 2019, 2.8% up from the same month in 2018. The BIR collected P235.5 billion in April 2019, while BoC collections stood at P51.7 billion.
The BIR’s biggest tax haul is usually recorded in April, as the deadline for filing and payment of annual income tax returns (ITR) is set on April 15. The deadline has been moved to end-May after the enhanced community quarantine (ECQ) was extended to April 30.
BIR Deputy Commissioner for Operations Arnel SD. Guballa said the deferment of tax filing and payments deadlines will drag April collections significantly lower.
“The annual ITR filing and payment was moved to May. Income tax (collection) is about P145 billion,” Mr. Guballa said in a mobile phone message.
Mr. Guballa added the decline in revenues could also be attributed to dampened business sales as the ECQ forced most Filipinos to stay home and other businesses, except for essentials, to halt operations temporarily.
BoC Assistant Commissioner and Spokesperson Vincent Philip C. Maronilla told BusinessWorld that a slump in oil prices and lower demand has dragged Customs revenues lower.
“Oil imports is our biggest revenue generator. Volume and value of oil are down,” Mr. Maronilla said via Viber.
In the first quarter, BIR and BoC generated P600.86 billion in collections, short by 20.63% of its P757.12-billion target and P10.17 billion lower year on year.
The Finance department has estimated that the government’s revenues could decline by as much as P318 billion if the 2020 gross domestic product will contract by one percent or by P286.4 billion if the economy posts zero growth.
However, Ms. De Leon assured that the funding gap could be covered by revenues generated by other agencies, income of the BTr, dividends from state-owned firms and other contributions.
The two agencies were tasked to collect P3.307 trillion this year, with BIR’s target at P2.576 trillion and BoC’s at P731 billion.