BIR in Manila misses tax goals from Jan. to Oct.

The Bureau of Internal Revenue (BIR) Manila region said on Monday it missed its collection targets from January to October by around P3 billion due to legislated tax cuts and a slower economy. "We are short by around P3 billion against our goal [from January to October]," BIR Manila Regional Director Arnel SD. Guballa told reporters in Filipino. "We are affected by legislative measures like Republic Act (RA) 9504 which provided higher personal exemptions. "We are also affected by the lower corporate income tax. Without these, we would have been okay," he added. BIR Manila Region, the third largest revenue region after Makati and Quezon City, is required to collect P26 billion in the first 10 months. A P3-billion shortfall would mean that the region collected around P23 billion during the period. Signed into law last year, RA 9504 or the tax relief law exempts minimum wage earners from income tax. The law also increases personal exemptions for individual taxpayers and additional deductions for qualified dependents. The individual exemption was raised to P50,000 from P20,000 for single workers, P25,000 for a head of family, and P32,000 for married individuals. The additional exemption for up to four dependents was raised to P25,000 for each from P8,000. On the other hand, the corporate income tax has been slashed to 30 percent starting this year from 35 percent in line with the Reformed Value Added Tax of 2005. Mr. Guballa said the economic downturn also placed a dent on the earnings of the Bangko Sentral ng Pilipinas (BSP), which comprise around a third of the region’s revenues. "The shortfall was partly due to the impact of the slowdown on the transactions of BSP. The behavior of economic transactions is beyond our control... The interest rates are also lower," he said. The BSP lends to banks based on prevailing interest rates. A lower interest rate would mean lower earnings for the central bank which in turn would mean lower tax dues. The BSP also has investments abroad that are vulnerable to volatile market conditions. Mr. Guballa admitted that it might prove difficult to meet their P36-billion full-year target this year. "It may be hard [to meet the full-year goal]. We already have a shortfall. We are hoping that our big ticket items like the BSP would recover," he said. "We also have final assessments that we issued to our large taxpayers. We hope we can get these," he added. To raise revenues, Mr. Guballa said they will continue to implement tax enforcement measures such as Oplan Kandado, a program that temporarily shutters tax delinquent establishments He also vowed to actively participate in the bureau’s SanTAX Claus project, which seeks to monitor trade fairs and bazaars during the holiday season to ensure that the sellers are paying the right amount of taxes. The BIR, which accounts for three-fourths of state tax revenues, is mandated to collect P798.5 billion. The bureau’s officials, however, had previously admitted that they may not be able to hit the target due to revenue-eroding measures and the impact of recent storms. - Alexis Douglas B. Romero, BusinessWorld