BIR beats lowered collection target for 2020
MANILA, Philippines — The Bureau of Internal Revenue (BIR) surpassed its watered down goal for 2020 in November, although collections remained significantly down from last year as health crisis disruptions cut tax receipts.
BIR raised P182.4 billion in November, Commissioner Caesar Dulay said in a text message on Wednesday, citing preliminary data.
With the November haul however, BIR would have already collected P1.78 trillion for the first 11 months, already surpassing its lowered P1.69-trillion target for the year.
Final figures will be reported by the Bureau of the Treasury later this month.
Although a milestone, BIR’s performance was largely aided by decisions from economic managers to downscale targets three times this year in April, June and September, to reflect falling tax receipts because of tepid consumption and business operations.
The adjustments resulted in BIR goal getting marked down by a massive 34.5% from the original P2.58 trillion. For the entire 2019, the bureau collected P2.18 trillion.
Indeed, year-on-year, BIR is suffering from lower tax receipts as the economy struggled to regain lost ground from movement restrictions. The preliminary November tax take, for instance, was lower by 21.4% from P232.1 billion collected same period a year ago.
The struggle to collect is so real that BIR even trained its sights on online firms, instructing vendors to secure tax identification numbers or risk getting penalized when caught doing business without permits. While online firms were never exempted from tax laws, taxmen concentrating resources online showed the difficulty in collecting from brick and mortar establishments struggling to survive from recent shutdowns.
More pain is expected in the last remaining month of the year when “traditionally, collections are lower,” Dulay said. For one, tax audits and examinations, which bring in unprogrammed revenues, are suspended during the holiday season to avoid opportunities where taxmen’s work can get compromised.
For December, BIR is tasked to collect P199.22 billion.
President Rodrigo Duterte’s economic team no longer tinkered with BIR’s collection goal when they reviewed economic targets for this year until 2022. They did acknowledge, however, that revenues in their entirety are faring better during the pandemic than initially expected months back.
As a result, total revenues are projected to hit P2.88 trillion this year, 13.2% more from P2.52 trillion seen last July. There was no available breakdown to show how much BIR would contribute to this, but the agency typically accounts for over 80% of annual tax revenues.
Higher than anticipated revenues, in turn, would contribute to the narrowing of the budget deficit. From P1.82 trillion projected last July, the budget gap is now seen to settle at P1.38 trillion, still a record-high and equivalent to 7.6% of economic output.
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