Tax bureau sets targets, priorities for this year - EcoFinBiz Blog

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Tax bureau sets targets, priorities for this year

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THE BUREAU of Internal Revenue (BIR) expects to collect nearly P80 billion from the tax reform law this year, which should help boost total revenues to a fresh record high.

Revenue Memorandum Order 9-2019 spells out the bureau’s collection targets for the year.

The BIR, which is the government’s biggest tax collector, is tasked to raise P2.331 trillion, 14.3% more than the P2.044-trillion target in 2018 and 18% more than the P1.962 trillion that the bureau actually collected last year.

For 2019, the BIR is counting on Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion (TRAIN) law that took effect in January 2018, to bring in an additional P79.012 billion this year. That law reduced personal income tax rates for those earning below P2 million and put in place a simpler system for computing donor and estate taxes. These foregone revenues will be offset by the removal of some value-added tax (VAT) exemptions; increased tax rates for fuel, cars, tobacco, coal, minerals, documentary stamps, foreign currency deposit units, capital gains for stocks not in the stock exchange, and stock transactions; and new taxes for sugar-sweetened drinks and cosmetic surgery.

Actual 2018 BIR collections of P1.962 trillion fell four percent short of program even as they were a tenth more than 2017’s tax haul of P1.781 trillion. Income tax and VAT collections went down from 2017, with faster inflation discouraging household spending and, in turn, leading to lower consumption tax collected.

This year, the tax bureau expects to collect P1.06 trillion from income taxes to account for nearly half its collection goal.

This is followed by VAT which is expected to contribute P506.825 billion, while excise taxes are projected to bring in P400.51 billion.

Revenue from percentage taxes are targeted at P112.366 billion, while other taxes are projected to add P177.453 billion. Meanwhile, taxes from non-BIR operations — consisting of final withholding and documentary stamp taxes on government securities transactions — are seen to bring in P73.206 billion.

By office, the Large Taxpayers Service that covers big businesses is projected to generate bulk of collections at P1.441 trillion, while revenue regions — the bureau’s various offices nationwide — are seen to raise P816.115 billion.

The administration of President Rodrigo R. Duterte expects to raise P3.2 trillion in total revenues this year.

Together with borrowings and official development assistance, these funds are expected to fuel a planned boost in state spending to as much as P3.8 trillion, including for more aggressive infrastructure development. — Melissa Luz T. Lopez

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