BIR’s corporate income tax collection hits P185B in October

Collections by the Bureau of Internal Revenue (BIR) from corporate income tax rose to P185 billion as of end-October 2007, or P28.42 billion higher than  the P156.58 billion collected in the same period last year.

The BIR’s corporate tax revenues come from earnings and withheld taxes of companies.

Of the P185 billion, collections from corporate earnings stood at P89.453 billion as of end-October while withheld taxes of companies rose to P95 billion.

In October alone, corporate income tax collections stood at P14.76 billion, comprising of P3.693 billion from corporate earnings and P11.068 billion from withheld taxes of companies.

The October figure is P1.65 billion higher  than the P13.11 billion collected in the same month  last year.

Tax collections from corporate earnings in October 2006, meanwhile, stood at P3.877 billion while withheld taxes during the period amounted to P9.233 billion.

The agency was able to exceed its corporate income tax collection goal for the first 10 months of the year given the strong performance of the economy during the period.

Data from the National Economic and Development Authority (NEDA) showed that gross domestic product (GDP) grew by 7.3 percent in the first half of the year.

In the second quarter of the year, GDP grew by 7.5 percent, data further showed.

The latest figures already exceeded the government’s GDP growth projection for the whole of 2007 of 6.1 to 6.7 percent.

A strong economy translates to strong corporate earnings for private companies.

Aside from strong economic growth, the BIR’s exceeded its corporate income tax collection goal for the 10-month period due to the increase in the corporate income tax rate to 35 percent from 32 percent.

The increase was implemented in 2005 as part of the enactment of Republic Act 9337 or the Expanded Value Added Tax Act of 2005.

For the whole year, the BIR is tasked to collect P765 billion. Officials are keeping their fingers crossed that the tax agency would be able to meet the target to help the government contain the budget deficit at P63 billion this year.