No need to cut revenue goals, says Recto

WITH a hefty task of collecting a record-high P4.3 trillion in revenues this year, Finance Secretary Ralph G. Recto said the tax collection of the Bureaus of Internal Revenue and of Custom, and their importance of hitting the numbers signals no need for a downward revision of revenue targets.

“Our revenue collection today seems to be on target. So right now, no need to revise it yet. So far, we’re on target,” Recto told reporters.

On Monday, the Department of Finance (DOF) said the national government’s borrowing plan was increased to P2.57 trillion in 2024, higher by 4.47 percent than the P2.46-trillion target set by the Cabinet-level Development Budget Coordination Committee (DBCC).

Recto clarified to reporters that the government did not revise the borrowing plan but the DBCC’S GDP growth target, which was slashed to 6 to 7 percent for 2024 from 6.5 to 7.5 percent.

“As a consequence of that, revenues will be less because of [lower] growth. Ergo, there’s a possibility of an increased borrowing,” Recto said.

e Finance chief added that these would all depend on whether the government will be able to hit its revenue targets this year, which, Recto stressed, the economic team did not reduce.

Recto explained that when DBCC’S GDP growth targets are too high, then revenue targets are also expected to be higher.

“If you fail to hit those [GDP] targets, you’ll fail to hit the revenue. Your deficit becomes higher.

at’s why we wanted to put it more realistically—realistic GDP growth numbers,” Recto added.

e bulk of the P4.3 trillion in revenues, or P3 trillion, will be raised by the BIR while the remaining P1 trillion will come from the BOC.

“I’ll be seeing them soon within the month to discuss the revenue targets this year and all the way to 2028. But the most important is this year because we’re already funding the budget this year,” the Finance chief added.

e BIR collected a total of P591.8 billion from January to

March this year, higher by 17.15 percent than the P505.2 billion it recorded in the same period in 2023.

“If [the BIR] can continue with that, we shouldn’t be borrowing more. In fact, we should be borrowing less,” Recto said.

BOC collection

MEANWHILE, the BOC generated P218.9 billion in the first quarter of 2024, up by 2.35 percent yearon-year from the P213.8 billion it posted in 2023.

Recto said the government is banking on better tax administration for 2024 and the coming years, specifically collecting taxes based on transactions done through e

commerce.

“It’s harder to collect from them right now so that will be part of our strategy and of our meeting [with the BIR],” Recto said. Recto noted that all e-commerce transactions are subject to tax, which the government is unable to collect revenues from.

Starting July 15, local online sellers who fail to submit a sworn declaration of gross remittances that their total income exceeds P500,000 in the previous or current year to the BIR Revenue District Office (RDO) will automatically be deducted of the 1 percent creditable withholding tax by the online selling platform where they are listed.

is is in line with Revenue Regulation (RR) No. 16-2023 which imposes a 1-percent withholding tax on one-half of the gross remittances made by e-marketplace operators and DFSPS to sellers/merchants for the goods or services sold/paid through their platform/facility.