Last year’s Cebu-Bohol tax take, however, is higher by P3.4B to 2016 collections
Losing one of its biggest taxpayers and the lack of huge one-time transactions proved to be too much for the Bureau of Internal Revenue (BIR)-13.
Initial data from the BIR-13, which covers Cebu and Bohol, showed that they fell short of their revenue collection goal of P29.380 billion for 2017.
According to lawyer Aynie Mandajoyan-Dizon, BIR-13 chief, they were only able to collect P27.531 billion in revenues from January to December of 2017. The amount is P1.849 billion or 6.29 percent short of their target for the past year.
“We lost our top taxpayer for Cebu City south which was sold to a buyer belonging to the Metro Manila area. It was a big corporation. It was a feedmill,” Mandajoyan-Dizon said without disclosing the name of the company for data privacy purposes.
Another factor was the lack of one-time transactions in the past year compared to other years like in 2015 when a portion of the South Road Properties (SRP) was sold by the Cebu City government for P16 billion.
Mandajoyan-Dizon said this transaction helped the BIR-13 surpass its target for 2015, but it also meant that they had higher goals for the succeeding years.
In 2016, the bureau set a goal of P26.7 billion but was only able to collect P24.168 billion. Just like in 2017, there were no one-time transactions at that period in 2016.
“For 2017, we were going smoothly except for the fact that we were really affected by one-time transactions in previous years. One-time transactions happen every now and then. If it’s significant in amount, it would really affect our performance,” she said.
Surpass attrition level
However, Mandajoyan-Dizon said she was happy to report that their collection for 2017 was P3.363 billion or 13.92 percent higher than their collection for 2016.
Another saving grace, she added, was that the bureau was able to surpass the attrition level of 7.5 percent collection deficit which is mandated by Republic Act 9335 or the Lateral Attrition Law. The law aims to encourage the BIR and the Bureau of Customs (BOC) to exceed their monthly revenue targets.
Under the law, if the BIR is 7.5 percent or more short of their revenue target, the bureau’s operations group, which includes the regional director, assistant director, collection group, assessment group and regional investigation group, will be subjected to a transfer of office or even dismissal from service.
“That is our consolation now. We are free from the attrition level which is 7.5 percent,” she said.
According to Mandajoyan-Dizon, the wholesale and retail business sector was the biggest tax contributing sector for 2017.
It is followed by the construction industry sector and the real estate businesses.
On the other hand, the sectors with the smallest contributions include those practicing their professions, stock brokers, marginal retail businesses, and the transportation sector.
Although they are still expecting more data on revenue collection coming in to their system until January 10, Mandajoyan-Dizon admitted that these could not patch up their P1.85 billion deficit.
The BIR has set a cutoff last December 29, 2017 for revenue collection officers on field to upload their data collection data to the Revenue Data Center.
But some of these officers are assigned in far cities and municipalities through mobile receipting devices, and they need to upload their data to the bureau’s system which also suffers from several downtime every day. This is why the deadline has been extended.
Some accredited agent banks have also failed to upload their collection by the deadline.
“By January 11, hopefully we will have the final figure for our performance for 2017. We are hoping our figures will improve and our collection will increase. Although looking at the deficit, it may be difficult to overcome it. But we are aspiring that the deficiency will reduce,” Mandajoyan-Dizon said.
For 2018, the BIR is yet to set a revenue collection goal.
With the implementation of the Tax Reform for Acceleration and Inclusion (Train) Law, Mandajoyan-Dizon said their central office will have to review the law’s effects on their collections before they can come up with a target.
For one, income tax revenue is expected to dip since workers with an annual income of P250,000 and below will not have to pay the tax under the new law.
“We are also expecting additional collection from VAT (value-added tax) because the power sector, which is subject to a two-percent franchise tax, will also be subjected to VAT on top of that,” she said.
The increase in excise taxes for fuel and petroleum products, cars, tobacco, coal and sweetened beverages, among others would also be a factor although excise tax is not collected in regional offices but only in the BIR’s central office.
She said though that even with the Train Law, they still expect their target collection for 2018 to increase. Historically, revenue targets of the BIR have never gone down in the succeeding year.
In order to cope with this, Mandajoyan-Dizon said they will be strictly implementing their medium taxpayers segmentation to focus on collection of taxpayers belonging in this group.
She said they will also be closely monitoring their top taxpayers to check on increases or decreases on their contributions. If there are decreases, she said they will have to know why.
Tax verification drives and door-to-door checking activities as well as post-evaluation of cash register machines will also be focused on by the BIR-13.
Also starting this year, the BIR has revised their zonal values for real properties. Compared to at least 10 years ago when it was last revised, Mandajoyan-Dizon said the rates now will be three or four times higher.
“This will generate additional capital gains tax, donors tax, and documentary stamp tax especially in Cebu where the real estate business is booming,” she added.