By Charissa Luci-Atienza
The Bureau of Internal Revenue (BIR) fell short of its P2.043-trillion revenue target for 2018, collecting only P1.961 trillion in taxes last year, BIR Assistant Commissioner for Collection Services Alfredo Misajon reported to the House Committee on Ways and Means Tuesday.
The BIR official said the collection shortfall reached P82.04 billion or 4.01 percent as against target.
Tax collection in 2018 was 10.5 percent higher than in 2017’s P1.780 trillion, Misajon noted. Of the P1.961-trillion collection in 2018, P982.47 billion came from income tax collection; P358.27 billion from Value-Added Tax; P290.64 billion from excise tax; P113.93 billion from percentage tax; P216.21 billion from other taxes; P3.65 billion from estate tax; and P3.50 billion from donors tax.
“We think the decrease, the 4.01-percent is still tolerable level, considering the fact that the salaried employees benefited from this,” Misajaon said.
But, Nueva Ecija Rep. Estrellita Suansing raised eyebrows at Misajon’s “unacceptable” declaration.
“Hindi acceptable that the deficit of 4.01 percent is tolerable. Once the target is set, you are bound to meet your targets,” she pointed out.
She even chided Misajon for not being “specific with his reasons” for the shortfall.
“Andami naming kalaban dito sa TRAIN (Tax Reform for Acceleration and Inclusion) law pero kayo sa BIR hindi nyo ginagawa ang dapat nyong gawin,” Suansing said.
TRAIN Law or Republic Act 10963, which was signed on December 19, 2017 and took effect on January 1, 2018, reduced the personal income tax, but imposed higher tax on sugary beverages, fuel, cars and tobacco.
Misajon said one of the economic factors which affected the performance of their collection is the inflation.
“Naglinger kasi, medyo mahabang period, the consumption pattern of our consumers. In fact sa report ng NEDA, nag contract yung consumption, and of course resulting to that, nag contract ‘yung consumption, bababa ‘yung dinedeclare ng businesses. Some of them may go out of business, some might have shifted to other kinds of non taxable consumption, na wala na kaming makokolekta na taxes,” he said.
During the hearing, he disclosed that the BIR failed to meet its P332.80-trillion excise tax collection target and P435.88-trillion VAT collection target for 2018. Last year, BIR only collected P290.64-trillion in excise taxes and P358.27-trillion in VAT.
He attributed the VAT collection shortfall to the reported decrease in revenues/receipts from sale of goods and services; and increase in input taxes claimed from purchase of services/domestic goods and importation.
Misajon cited the following the reasons for the excise tax collection shortfall: a. Petroleum—loss of market share by two refineries-Petron and Pilipinas Shell; importations of diesel and LPG grew by 158 percent and 184 percent, respectively; petroleum products did not generate excise tax; and fuel marketing project was not implemented; b. Sweetened beverages—shift from high-fructose corn syrup (HFCS) at the rate of P12 per litre to ordinary sugar at P6 per liter; c. Automobile—decline in volume of removals and higher excise tax on most cars; d. Minerals—appeal of tax exemption by Semirara Mining and Power Corp. and suspension of operation of some mining companies; and e. Cosmetic procedures— implementing rules and regulations have not been issued.
“But overall, yung collection ng BIR despite the perfect storm that hit us, the high inflation and the deteriorating peso dollar rate, we survived. In fact, we registered a double-digit increase in our collection, that’s a good sign. Hopefully this year, na nag taper out na yung inflation pressure, we expect that business environment will continue to prosper,” he said.
During the hearing, Surigao del Sur Rep. Johnny Pimentel asked the BIR about its revenue target for 2019 and to ensure that it would meet its collection target for this year.
Misajon expressed confidence that they would meet their P2.339-trillion collection target for 2019, given the “improving” economic condition.
“With the current performance of the economy, I think we are pretty well confident that we will reach the goal, the fact that the storm that had prevailed last year is not present. At the moment, we feel that the economic condition is improving then there are indications that we can have very good collection prospect,” he told the panel.
For his part, BIR Commissioner Ceasar Dulay said the agency will exhaust all means to reach its target.
“Well, we’ll have to do everything to reach the target. We have programs already. We have a program of intensified audit, and we have to continue with our RATE (Run Against Tax Evaders) program,” he said.
He said the reason for the collection shortfall is “a combination of factors.”