Gov’t raises P16.1B from EVAT collection in 1st quarter

The Arroyo administration raised P16.1 billion from the implementation of its expanded value-added tax (EVAT) program during the first quarter of the year, exceeding its target by almost P600 million.

Data from the Department of Finance (DOF) showed that amid the shortage in tax collection, the government was able to realize added revenues during the first quarter as the VAT rate was increased from 10 percent to 12 percent beginning February.

For the first quarter of the year, the DOF had projected that collections could reach P15.5 billion but officials said actual revenues reached P16.1 billion.

Finance Undersecretary Gil Beltran said the VAT is now a major revenue earner for the government.

He said the BIR collected a total P5.1 billion from RVAT, or P500 million lower than its target from the revenue measure while the BOC generated P11 billion from RVAT in the first quarter, higher by P1.2 billion versus its goal.

Beltran said the BOC enjoyed improved collections due to increased import volumes and higher oil prices. The BIR, on the other hand, was affected by the decline in domestic oil production and lower yields from input VAT cap and crediting.

Despite these factors, Beltran said the BIR’s RVAT collection was helped by lower input claims and improved VAT collection efficiency due to the broader coverage of the tax.

"There is increased efficiency. VAT provides an audit trail because one firm’s sales is another company’s purchases," he explained.

Since the implementation of the Reformed VAT Law or Republic Act 9337 in November, total collections amounted to P20.6 billion for the five-month period to March, Beltran said.

Total BIR collections reached P5.4 billion from RVAT while BOC revenues amounted to P15.1 billion from November 2005 to March 2006.

Gross RVAT collections amounted to P24.1 billion for the five-month period. The lifting of exemptions on petroleum products generated P15.8 billion; electric power, P1.2 billion; transportation, P220.2 million; medical services, P56.3 million; legal services, P25.9 million; passenger vessels, P8.7 million; non-food agricultural products, P7.9 million; and professionals, P0.8 million. Input VAT spreading and caps generated P2.3 billion and VAT withholding on government purchases generated P498.2 million.

According to the DOF, non-VAT reforms generated P418.2 million with the increases in the rate for corporate income tax yielding P288.2 million; gross receipts tax, P49.3 million; and PAGCOR tax payments, P79.6 million.

The mitigating measures resulted in foregone revenues of P4.9 billion. Bulk was accounted for by the reduction in excise taxes on petroleum products which amounted to P3.7 billion. The repeal of the franchise tax on power distribution and the common carrier’s tax on domestic transport resulted in P0.9 billion and P38.4 million revenues lost respectively.