VAT, excise taxes may offset drop in corporate income tax

The Bureau of Internal Revenue (BIR) hopes to offset foregone revenues from lower corporate income tax by collecting higher value-added and excise tax collections to meet its P86.2-billion goal this month. Collections rose stood at P57.5 billion as of April 19, almost two-thirds higher than a year earlier, BIR Commissioner Joel L. Tan-Torres said in a press briefing on Wednesday. "We are hopeful that we will exceed our April target because of our efficiency," he added. The tax chief said collections for the first quarter hit P174.5 billion, P16.8-billion more than the target. Last week, Tan-Torres said collections for April, the deadline for annual tax filings, might weaken due to foregone revenues worth P4 billion from the drop in corporate income tax rate to 30 percent from 35 percent, and about P7.4 billion from claims of business losses from storms late last year. He reiterated that the bureau could collect only P700 million out of the P1.2 billion originally estimated from the 5-percent withholding tax on campaign paraphernalia spending of poll candidates. He said the bigger estimate considered campaign-related spending since December, but the government could collect only on spending during the official campaign period, which runs from February 9 to May 8 for national candidates and March 26 to May 8 for local ones. To date, he said, collections of this tax had reached around P200 million. — Louella D. Desiderio, BusinessWorld