Tax collections down in Q1 due to COVID-19
The first-quarter tax collections of the Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC) not only declined but also slid below target as the COVID-19 pandemic and the resulting quarantine imposed since mid-March hurt domestic businesses as well as external trade.
In a statement on Saturday, the Department of Finance said the country’s two biggest revenue agencies collected P600.86 billion in taxes and import duties from January to March, down 1.7 percent from P611.03 billion during the same period last year.
The actual end-March joint BIR and BOC take was 20.6-percent lower than the P757.12-billion target for the three-month period.
In March alone, tax collections reached only P163.15 billion, below the P197.64 billion a year ago and P248.5-billion goal for the month.
“Our tax collections are definitely going to be a bit lower than our original target but these are things that we can finance,” Finance Secretary Carlos Dominguez III said, adding that the “sound economic policies put in place by President Duterte since 2016 has given the government ample fiscal headroom to meet the challenges of COVID-19.”
Estimates of the Development Budget Coordination Committee (DBCC) showed foregone revenues to reach P286.4 billion if gross domestic product (GDP) posted zero growth this year, or a larger P318.9 billion if GDP contracted by 1 percent. The economic team expects GDP to post zero growth at best and contract by 0.8-1 percent at worst in 2020.
The BIR’s first-quarter tax take amounted to P455.45 billion, down from P468.86 billion a year ago and below its P590.43-billion target.
Its large taxpayers service’s (LTS) end-March collections reached P284.39 billion, down from P302.98 billion last year and lower than the P386.19-billion goal.
Last March, total BIR collections dropped to P118.35 billion from a year ago’s P148.05 billion and fell short of its P190.48-billion target.
The BIR’s LTS collected P80.19 billion in March, down from P97.1 billion last year and below-target of P124.47 billion.
As for the BOC, its take of import duties and other tax amounted P145.41 billion in the first quarter, up from P142.17 billion a year ago but beneath its P166.69-billion goal.
In March, the BOC collected P44.8 billion, lower than last year’s P49.59 billion as well as its target of P58.02 billion.
For 2020, the DBCC had tasked the BIR to collect P2.576 trillion, while the BOC must generate P731 billion, or a combined P3.307 trillion in tax revenues. INQ
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