Tax collections down 21.5% to P706.8 billion in Jan to April

MANILA, Philippines — Revenues generated by the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) dropped in the first four months following the imposition of strict quarantine measures as well as the extension of the deadline for the filing and payment of income taxes.

According to preliminary data from the DOF, total collections of the BIR and BOC amounted to P706.85 billion from January to April, 21.5 percent lower than the P900.33 billion recorded in the same period last year.

The DOF said this is also P28.17 billion short of the government’s tax collection target of P735.03 billion for the period.

For April alone, the two agencies raised P105.75 billion, which is lower by 63.48 percent than the P289.6 billion they collected in the same period last year.

The amount is also P25.25 billion lower than the combined BIR and BOC target of P131 billion for the month.

According to the DOF, P527.41 billion of the total revenues generated in the first four months of the year came from the BIR.

This is 25.4 percent lower than last year’s P706.78 billion, and 0.19 percent short of the bureau’s P528.44 billion goal for the four-month period.

For April alone, the BIR’s revenues slumped by 69.83 percent to P71.78 billion from P237.93 billion in the same month last year.

The DOF said the decline in the BIR’s collection was a result of the strict quarantine measures imposed in different parts of the country, which prompted the agency to extend the deadlines for the annual filing and payment of income taxes and other tax types.

Still, Finance Secretary Carlos Dominguez said the government would still be able to capture the uncollected taxes, as they are merely postponed.

“That tax will be intact because that is earned from last year. What we really lost is the VAT (value-added tax) collections, excise tax collections between mid-March until end-May, that is the big loss,” he said.

Meanwhile, DOF data also showed that the BOC’s collections from January to April decreased by 7.29 percent to P179.44 billion from P193.55 billion a year ago.

This is also 13.14 percent lower than agency’s goal of P206.59 billion for the period.

Revenues generated by the BOC amounted to P33.97 billion in April, 34.27 percent lower than the P51.67 billion in the same period last year and 40 percent lower than the target of P56.54 billion.

The BIR has extended the deadline for the annual filing of 2019 income tax returns (ITR) to provide relief to Filipinos amid the coronavirus pandemic and the implementation of the enhanced community quarantine.

Initially, the due date for filing of ITRs and the payment of corresponding taxes was extended from April 15 to May 15. This was further extended to May 30, following the extension of the enhanced community quarantine to April 30.

The deadline was further postponed for the third time to June 14 after the Luzon-wide quarantine was extended by another two weeks to May 15.

Meanwhile, Dominguez, in a text message to reporters, said the DOF is looking at the proposal to impose tax on digital services to help the government generate revenues from VAT collections.

“(This is) something to seriously consider,” Dominguez said when asked for his position on the proposed measure of House ways and means committee chairman Joey Salceda.

“It’s to be able to collect VAT,” he said.