BIR misses January-October target by P26.5B

The Bureau of Internal Revenue (BIR) incurred a revenue shortfall of P26.538 billion as of end-October due to an increase in tax exemptions and collection inefficiencies.

The government’s main revenue earner collected P644.811 billion from January to October or P26.538 billion short of the revenue goal for the 10-month period of P671.349 billion.

However, compared to collections in the same period last year of P575.438 billion, the latest figures are higher by P69.37 billion.

In October alone, the agency collected P56.94 billion or P7.65 billion short of the revenue goal of P64.59 billion for the period but P3.42 billion higher than the P53.52 billion collected in the same month last year.

This year, the agency is tasked to collect P845 billion, 18.4 percent higher than last year’s collection of P713.6 billion.

However, newly-appointed BIR commissioner Sixto Esquivias IV said the agency is likely to collect only P810 billion or about P35-billion short of the programmed collection this year partly because of the implementation of the tax relief law or Republic Act 9504 last July.

The BIR earlier projected that it would lose P11.8 billion in revenues this year because of the implementation of Republic Act 9504, the law that exempts minimum wage earners from the payment of tax. The law also increased the tax exemption for regular income earners.

Esquivias replaced former BIR commissioner Lilian Hefti who resigned in October due to health reasons.

While the BIR fell short of its targets, the second largest revenue agency, the Bureau of Customs (BOC) exceeded its programmed collection of P209.66 billion in the first 10 months by P8.53 billion, generating P218.94 billion worth of import duties and taxes.

Furthermore, the BOC continued to benefit from the high oil and rice prices in the first half of the year as well as strong non-cash collections through the tax expenditure fund of state agencies, particularly the National Food Authority (NFA) which uses the TEF for its rice importation.

The so-called TEF is a subsidy released by the Department of Budget and Management (DBM) to government-owned and controlled-corporations and state-run companies mainly to settle customs duties and other taxes arising from the importation of goods.

In October alone, the BOC exceeded its collection target of P23.734 billion by P1.248 billion after generating P24.982 billion.

With the latest BIR and BOC collections, the government’s budget shortfall widened by 50.2 percent to P62.3 billion as of end-October compared with the P41.5 billion deficit incurred in the same period last year.

This after government expenditures rose by 10.5 percent to P1.034 trillion during the period from P937.4 billion as revenues increased by only 8.5 percent to P972.6 billion from P896 billion.

The government has programmed to post a budget deficit of P75 billion this year or one percent of gross domestic product (GDP) from P12.4 billion which was 0.2 percent of GDP last year.