Lower income tax collection in Q1 reported

The government’s main tax bureau missed its goal for revenue heavyweight net income and profits, dragging down the agency’s above-target collections from excise, consumption levy and businesses in the first three-months of the year.

Based on the Bureau of Internal Revenue (BIR) report presented to debtwatcher Moody’s Investors Service, the agency said that total tax collection in January to March 2017 reached R370.61 billion, lower by 1.5 percent against the R376.17 billion target for the period.

However, the BIR reported that the bureau’s tax collections increased by 12.25 percent in the first three-months compared with R330.17 billion in the same period last year.

By type of tax, collection from net income and profits amounted to R201.12 billion, short by 4.4 percent against the 210.3 billion target. But year-on-year, the agency’s income taxes grew by 12 percent from R178.54 billion.

Revenue from income taxes is the biggest contributor to BIR operations, accounting for about 54.27 percent of the bureau’s total tax take at end-March this year.

Value-added tax (VAT), meanwhile, cornered the second biggest share in BIR revenues with a total collection of R87.93 billion, slightly higher against the R87.65 billion target for the first quarter.

Likewise, VAT collections rose by 10.3 percent compared with R79.72 billion in the first three-months of 2016.

Tax levied on excise also surpassed the collection target of R35.33 billion during the January to March period by 9.4 percent to R38.64 billion. The endMarch revenue take is also higher by nine percent versus the R35.48 billion registered a year ago.

On the other hand, BIR percentage tax collection contributed R18.97 billion to the bureau’s total revenues in the first-quarter, higher by 8.7 percent against the R17.44 billion goal for the period.

Year-on-year, revenues from percentage taxes jumped by a hefty 22.7 percent from R15.46 billion in the firstquarter of 2016.

Lastly, “other taxes” brought in R23.95 billion to government coffers, which is short by 5.9 percent to hit the R25.44 billion target. However, the figure is higher by 14 percent compared with R20.96 billion in the same period last year.

For 2017, the BIR is tasked to collect a record R1.829 trillion, up by 16 percent compared with R1.576 trillion in 2016.