By Chino S. Leyco
The Bureau of Internal Revenue (BIR), the government’s main tax agency, missed its collection target last year owing to lower-than-expected income from the first tax reform law.
Based on the BIR presentation before the House congressional oversight committee, the agency reported that it has raised P1.961 trillion in January to December 2018, below by 4.01 percent against the P2.043 target for the year.
However, the BIR noted that its total tax revenues last year was higher by 10 percent compared with P1.781 trillion collection in the previous year.
According to the BIR, the shortfall is attributable to weak collections from excise and value-added taxes (VAT), which were included in the tax reform for acceleration and inclusion act (TRAIN).
In particular, the agency said that excise tax revenues from petroleum, sweetened beverages, automobiles, minerals, and cosmetic procedures failed to reach their targets.
For this reason, the BIR said they dragged down the total excise tax collections of the agency last year to P290.64 billion, lower by 39 percent against the P332.8 billion target.
“Petroleum: loss of market share by two refineries; importation of diesel and liquified petroleum gas grew by 158 percent and 184 percent, respectively; petroleum products did not generate excise tax; fuel marketing project was not implemented,” the BIR reasoned out.
For sweetened beverages, the BIR noted that sugary drink manufacturers shifted “from HFCS [high-fructose corn syrup] at the rate of P12 per liter to ordinary sugar at P6 per lilter” to avoild paying higher taxes.
The BIR, meanwhile, said that car sales dropped last year owing to higher taxes on most automobiles, while revenues from minerals failed to hit expectations due to the tax exemption appeal of the Semirara Mining and Power Corp. as well as suspension of operations of some mining firms.
The tax agency, however, admitted that the government failed to release the implementing rules and regulations of the cosmetic tax that prohibited the BIR to impose taxes on cosmetic procedures.