BIR won’t lower 2015 revenue target

CEBU, Philippines – The Bureau of Internal Revenue will not downgrade its 2015 revenue target in the near-term after it just recently lowered its overall goal and the targets of its collecting units following the recent passage of a law raising the tax exemption of bonuses, an official said.

Marivic Galban, taxpayers service program chief of the national BIR, said reduction in revenue target won’t happen unless there is an enactment of law that could notably affect the bureau’s tax collection. She said any tax eroding measure that will be passed into law could push for a revenue goal reduction.

“When we study some changes in the tax provisions, hand in hand we also look at the effects in terms of the collection of the BIR,” Galban told The FREEMAN in an interview. She was in Cebu last week for BIR 13 Cebu City’s a tax campaign.

“Unless otherwise if it [a measure] becomes a full-fledged law kasi habang niluluto sa Congress hindi mo pa alam kung maaprubahan ba. It goes a process of deliberation,” she explained.

It can be remembered the revenue agency recently slashed its overall tax goal this year to P1.674 trillion, down from P1.704 trillion targeted previously. This developed after President Aquino signed into law a bill adjusting the tax exemption ceiling of 13th month pay and other benefits from P30,000 to P82,000.

With this law, the BIR has insisted the government stands to lose up to P30 billion in potential revenues.

Despite this, Galban has seen the positive side of this development, saying this will hopefully increase the purchasing power of salary wage earners as they will eventually have higher take-home pay.

“If there is higher purchasing power, it means more sales to our businessmen,” she noted. Tax losses could be recovered from taxes on purchased goods and services and direct taxes.

The BIR recently released the implementing rules on the new law, saying its effectivity has started in January 1 this year. It means that starting this year, Filipino workers will have a tax-free year-end bonus of up to P82,000. 

Pending measures

Currently, some tax reducing measures are also pending in the Philippine Congress.

One of which is a bill aiming to lower the individual income tax rate and adjust individual income tax brackets in the country.

The Philippines has currently the highest income tax rate at 32% among other Southeast Asian countries. A salaried worker earning P500,000 or more annually is taxed 32%, excluding personal and other exemptions. A bill in Congress has suggested to bring down the country’s tax rate for individuals to 25%.

An income tax reform has long been pushed to simplify the nation’s tax structure, adjust tax brackets and cut tax rates.

The Tax Management Association of the Philippines has expressed its support for the lowering of income tax rates in the country.