BIR, BoC surpass tax collection goals in July

THE government’s main revenuegenerating agencies exceeded their tax-take targets by single digits last month on improved spending and economic activities, the Department of Finance (DoF) reported on Thursday.

At the joint press conference of the members of interagency Development Budget Coordination Committee on Thursday, Finance Secretary Carlos Dominguez 3rd said the Bureau of Customs (BoC) bested its July collection goal by 5 percent on the back of higher import volumes.

Data showed that Customs’ actual tax take reached P50.07 billion in the month, bigger than its P47.67- billion goal, which Dominguez said “signals rising economic activity.”

Meanwhile, the Bureau of Internal Revenue’s (BIR) collection reached P126.72 billion, 2 percent better than its P124.14-billion target.

“The major tax gains last month were seen in both excise and value added taxes, [indicating that] consumer spending is starting to pick up,” Dominguez said.

Despite the improvement, the latest BoC and BIR collections remain smaller than the P54.6 billion and P180.3 billion they gathered, respectively, in July 2019.

Year- to- date, Customs’ tax take shrank by 15.24 percent to P303.17 billion from P357.17 billion in the same period last year, while the Internal Revenue’s collection declined by 4.71 percent to P1.08 trillion from P1.13 trillion.

According to Dominguez, the above-target tax take last month reflected improving manufacturing and trade sectors.

“We are beginning to see the light of the end of the tunnel. Improvements are seen in the manufacturing sector as the economy gradually reopens,” he said.

He also said the value of production index for June showed a smaller annual decrease of 22.5 percent, compared with the 31.2- percent drop in May and 41.2-percent plunge in April.

While the volume of production index that month fell by 19.3 percent year-on-year, it was slower than May’s 28.5-percent fall and April’s 38.8-percent decrease. Also, overall manufacturing capacity reached 73 percent in June, up from 72.4 percent in May and 70.5 percent in April.

The country’s total merchandise trade further eased its negative trajectory in June, with a slower decline of 19.9 percent after a steep 35.3-percent contraction in May and 59.5 percent in April.

“This slower decline in the country’s trade performance signals [the] resumption of economic activities,” Dominguez explained.