BIR 13 exceeds collection target by 16 percent in Q1

CEBU, Philippines — The Bureau of Internal Revenue-Cebu collected P6.17 billion in the first three months of 2018, 16 percent above its target for the quarter, but the agency expects a challenging task to hit its overall goal as it expects the TRAIN law to pull down its income tax take.

In a phone interview yesterday, Eduardo Pagulayan Jr, new regional director of BIR-Cebu, said the agency remains "apprehensive" on the impact of the Tax Reform for Acceleration and Inclusion (TRAIN) Act on income tax collection.

BIR-Cebu's P6.17-billion collection in first quarter is up 1.65 percent from P6.07-billion tax take in same period last year and up 16.20 percent of the P5.53-billion goal.

Pagulayan said he expects TRAIN to further affect the bureau's collection in the coming quarters.

He said income tax accounts for 30 percent of the total collections of the agency.

The revenue official pointed out the agency is banking on to boost its collection efficiency to offset the reduction in income tax take.

"We are new making remedial measures," he told The FREEMAN. 

"We will boost our enforcement activities," the regional director noted.

Bulk of the tax collections of BIR-Cebu will come from personal income taxes despite the impact seen from the implementation of the TRAIN which cuts personal taxes.

BIR-13 is set to collect P18.3 billion in personal income taxes this year.

The TRAIN, which was approved by President Duterte December last year, exempts those earning an annual taxable income of P250,000 and below from paying income taxes.

It is believe to benefit over six million compensation earners starting January this year. The 13th month pay and other bonuses not exceeding a total of P90,000 are also tax exempt under TRAIN.

For those earning P250,000 and above, the tax brackets have also been adjusted so that those with taxable income of more than P250,00 but not above P2 million pay only between 20 and 30 percent PIT.

TRAIN's impact on BIR-13's collection is pegged at P2.5 billion.

BIR-13's collection goal was adjusted to P31.3 billion from the initial P33.8 billion.

Based on official data, BIR-13 is set to collect this year P9.4 billion in value-added tax (VAT); P11.6 million in excise taxes; P1.2 billion in percentage taxes; P2.5 billion in other taxes.

In 2017, BIR-13 collected P27.59 billion, 6.11 percent short of its P29.38 billion.

BIR-13 collects taxes in Cebu and Bohol through five revenue district offices.

In December, BIR-13 launched its segmentation of medium taxpayers which is seen to help its collection efficiency improve.

The said top 500 taxpayers comprise the Medium Taxpayers Segment (MTS) of the region.

During its initial implementation, the project will cover the top 500 non-individual taxpayers. In the next five years, BIR-13 is looking to increase the number to 1,500 to eventually increase the tax contribution of the group to more than 50 percent.