Tax collections shrink in March
Published Apr 19, 2020 12:00 am
By CHINO S. LEYCO
Collections of the government’s two main tax agencies shrunk by 17.4 percent in March following the implementation of the enhanced community quarantine (ECQ), the Department of Finance (DOF) reported.
Finance Secretary Carlos G. Dominguez III
In a statement, Finance Secretary Carlos G. Dominguez III said the Bureau of the Internal Revenue (BIR) and Bureau of Customs generated only ₱163.15 billion, lower by ₱34.5 billion or 17.4 percent compared with the ₱197.64 billion collections in the same month last year.
For the BIR, collections reached ₱118.35 billion, down by 20 percent year-on-year from ₱148.05 billion, while Customs took in only ₱44.8 billion, also lower by 9.6 percent compared with ₱49.59 billion a year ago.
As expected, the two tax agencies also missed their collection target of ₱248.5 billion by 34 percent for the month.
The BIR registered a collection shortfall of 38 percent or ₱72.14 billion, while Customs registered a 22.78 percent or ₱13.22 billion below target tax take.
To recall, President Rodrigo R. Duterte imposed the Luzon-wide ECQ on March 16 to slow the spread of the 2019 coronavirus disease (COVID-19) pandemic. Similar containment measures have likewise been implemented by local governments in other parts of the country. The significant drag in March also pulled down the government’s collections in the first three-months of the year.
Actual collections by the bureaus declined by 1.6 percent at end-March to ₱600.86 billion from ₱611.03 in the previous year. The actual take was also 20.6 percent or ₱156.26 billion short of the ₱757.12 billion target for the first quarter.
“Collections for March took the biggest hit,” Dominguez said, noting most economic activities in Luzon during the month have come to a standstill because to the ECQ.
In January to March, the BIR collections decreased by three percent to ₱455.45 billion from ₱468.86 billion last year, which is also below the agency’s target of ₱590.43 billion for the period by 22.86 per-cent.
The Customs collection, meanwhile, slightly improved in the first-quarter by 2.2 percent to ₱145.41 billion a year ago from ₱142.41 billion, but it was 13 percent less compared with its target of ₱166.69 billion for the three-month period.
Dominguez already said that the country’s economy may post a zero growth this year due to COVID-19, which would result in decrease in revenues of around ₱286.4 billion.
But if the economy, as measured by the gross domestic product (GDP), would contract by one percent in 2020, it is estimated to pull down the government’s revenue by ₱318 billion.
Under the original revenue collection target, the two tax agencies were expected to raise ₱3.307 trillion in 2020. Of that amount, the BIR was tasked to collect ₱2.576 trillion, while Customs was seen to generate ₱731 billion.
“Our tax collections are definitely going to be a bit lower than our original target but as I said, these are things that we can finance,” Dominguez said.
The finance chief said the sound economic policies put in place since 2016 has given the government ample fiscal headroom to meet the challenges of COVID-19.
Finance Secretary Carlos G. Dominguez III
In a statement, Finance Secretary Carlos G. Dominguez III said the Bureau of the Internal Revenue (BIR) and Bureau of Customs generated only ₱163.15 billion, lower by ₱34.5 billion or 17.4 percent compared with the ₱197.64 billion collections in the same month last year.
For the BIR, collections reached ₱118.35 billion, down by 20 percent year-on-year from ₱148.05 billion, while Customs took in only ₱44.8 billion, also lower by 9.6 percent compared with ₱49.59 billion a year ago.
As expected, the two tax agencies also missed their collection target of ₱248.5 billion by 34 percent for the month.
The BIR registered a collection shortfall of 38 percent or ₱72.14 billion, while Customs registered a 22.78 percent or ₱13.22 billion below target tax take.
To recall, President Rodrigo R. Duterte imposed the Luzon-wide ECQ on March 16 to slow the spread of the 2019 coronavirus disease (COVID-19) pandemic. Similar containment measures have likewise been implemented by local governments in other parts of the country. The significant drag in March also pulled down the government’s collections in the first three-months of the year.
Actual collections by the bureaus declined by 1.6 percent at end-March to ₱600.86 billion from ₱611.03 in the previous year. The actual take was also 20.6 percent or ₱156.26 billion short of the ₱757.12 billion target for the first quarter.
“Collections for March took the biggest hit,” Dominguez said, noting most economic activities in Luzon during the month have come to a standstill because to the ECQ.
In January to March, the BIR collections decreased by three percent to ₱455.45 billion from ₱468.86 billion last year, which is also below the agency’s target of ₱590.43 billion for the period by 22.86 per-cent.
The Customs collection, meanwhile, slightly improved in the first-quarter by 2.2 percent to ₱145.41 billion a year ago from ₱142.41 billion, but it was 13 percent less compared with its target of ₱166.69 billion for the three-month period.
Dominguez already said that the country’s economy may post a zero growth this year due to COVID-19, which would result in decrease in revenues of around ₱286.4 billion.
But if the economy, as measured by the gross domestic product (GDP), would contract by one percent in 2020, it is estimated to pull down the government’s revenue by ₱318 billion.
Under the original revenue collection target, the two tax agencies were expected to raise ₱3.307 trillion in 2020. Of that amount, the BIR was tasked to collect ₱2.576 trillion, while Customs was seen to generate ₱731 billion.
“Our tax collections are definitely going to be a bit lower than our original target but as I said, these are things that we can finance,” Dominguez said.
The finance chief said the sound economic policies put in place since 2016 has given the government ample fiscal headroom to meet the challenges of COVID-19.