BIR falls short of Q1 collection goal

Bureau of Internal Revenue (BIR) staff check the income tax returns submitted by individuals and business owners at the BIR Office in Intramuros, Manila, April 18. — PHILIPPINE STAR/ RUSSELL A. PALMA

THE BUREAU of Internal Revenue (BIR) missed its collection target by 8.9% in the first quarter, as businesses made use of tax credits for raw materials under the Tax Reform for Acceleration and Inclusion (TRAIN) law, the Department of Finance (DoF) said on Sunday.

According to a DoF statement, the BIR collected P485.4 billion in the first three months of 2022, below the Development Budget Coordination Committee’s (DBCC) P532.6-billion target.

However, the tally was 7.2% higher than the P452.9 billion collected by the BIR in the first quarter of 2021.

“(The) shortfall was due to businesses deciding to fully utilize their input value-added tax (VAT) credits on purchases available to them under Section 35 of the TRAIN law,” BIR Deputy Commissioner Arnel SD. Guballa was quoted as saying.

Before Jan. 1 this year, the Tax Code required that input VAT from purchased capital goods with an aggregate acquisition cost of P1 million and above should be spread out over a 60-month period.

Since outright crediting of input VAT on capital goods is now allowed, the BIR was P17.4 billion short of the VAT collection target and P9.4 billion short of the income tax collection goal, Mr. Guballa said.

By region, the National Capital Region (NCR) accounted for the bulk of the first-quarter collections with P399.779 billion. The NCR collection includes the P285.99 billion collected by the BIR’s Large Taxpayers’ Service in the three-month period.

Among cities, Makati had the biggest collection with P26.09 billion, followed by Quezon City with P19.72 billion, Taguig with P18 billion and Manila with P11.56 billion.

Region IV-A (Calabarzon) collected P19.1 billion in revenues, followed by Region VII (Central Visayas) with P15.21 billion, and Region III (Central Luzon) with P12.88 billion.

Meanwhile, revenue from non-BIR operations for the first three months of the year amounted to P18.1 billion.

This brought the BIR’s total revenue for the quarter to P503.5 billion, jumping by 7% from P470.5 billion in the same period in 2021. However, the total revenues fell 8.8% short of the DBCC’s target of P551.78 billion for the January to March period.

The government borrowed heavily to finance its pandemic response, as revenues dropped during the lockdown and economic slowdown.

The BIR, the government’s largest collecting body, is tasked to collect P2.43 trillion this year.

On Saturday, the DoF said it ordered the BIR to suspend the creation of special audit task forces to prevent duplication of functions of BIR offices, and reduce confusion among taxpayers.

The BIR also ordered a halt to all field audit and other field operations under the task forces authorized to conduct examinations and verifications of taxpayers’ books of account, records and other transactions.

The agency had created special audit task forces on real estate developers and direct selling/multi-level marketing, as well as task forces for Philippine Offshore Gaming Operators and electronic sabong (e-sabong) to check their tax compliance. — T. J. Tomas