BIR's shortfall swells to P40.7 B as of November

The Bureau of Internal Revenue’s revenue shortfall swelled to P40.694 billion as of end-November 2008 due to an increase in tax exemptions put in place last year and perennial collection inefficiencies.

The government’s main revenue earner collected P721.556 billion from January to November 2008 or P40.694 billion below the P762.250 billion for the 11-month period, latest data from the government showed.

However, compared to collections in the same period in 2007 of P647.690 billion, the latest figures reflected an increase of P73.866 billion or 11.4 percent.

In November 2008 alone, the agency collected P76.745 billion, or P14.156 billion below the revenue goal for the month of P90.901 billion.

On the other hand, the latest figure is slightly above the agency’s collections in November 2007 of P72.252 billion or a difference of P4.493 billion.

For 2008, the agency is tasked to collect P845 billion, 18.4 percent higher than the previous 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 for 2008 partly because of the implementation of the tax relief law or Republic Act 9504 in July last year.

Last year, the BIR projected that it would lose P11.8 billion in revenues for 2008 alone 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.

Despite the dismal performance of the BIR, fiscal authorities expressed optimism that the 2008 budget deficit is likely to fall below the P75 billion deficit ceiling for the year, because of higher-than-expected royalty payments from the Malampaya natural gas project and net proceeds from the sale of the government’s stake in Petron Corp. The consortium behind the Malampaya natural gas project has remitted to the Bureau of the Treasury (BTr) roughly P13 billion in royalty payments for 2008.

Officials said the amount from the Malampaya consortium was unexpected and had not been included in the programmed revenues.

The Malampaya consortium, which operates the 2,700 MW deep water-to-gas project, consists of Shell Philippines Exploration B.V. (Spex) and Chevron Texaco, each holding a 45 percent stake in the project.

The Philippine National Oil Company-Exploration Corp., the government’s exploration arm, holds a 10 percent stake.

The government, meanwhile, generated net proceeds of P21 billion from the sale of its 40 percent stake in Petron Corp. The stake was sold to the Ashmore Group of London last December.