BIR 13 falls short of collection goal

The Bureau of Internal Revenue in Cebu (BIR-13) collected P20.40 billion in the first nine months of 2018, missing the P22.98 billion collection target for the period.

Despite the shortfall, BIR-13 regional director Eduardo Pagulayan remained optimistic the agency will hit its P31.3 billion overall goal for the year.

Based on official data obtained by The FREEMAN yesterday, BIR-13's January-September tax take was down 11.23% versus the target but was up 4.19% from the P19.58 billion collection in the same period last year.

BIR-13, which collects taxes in Cebu and Bohol, is tasked to collect P31.3 billion this year. Based on official data, it is set to collect P18.3 billion in income taxes this year; P9.4 billion in value-added tax (VAT); P11.6 million in excise taxes; P1.2 billion in percentage taxes; P2.5 billion in other taxes.

Last year, BIR-13 collected P27.59 billion, 6.11% short of its P29.38 billion target. Pagulayan said one of the setbacks curtailing the agency's collection this year is the Tax Reform for Acceleration and Inclusion (TRAIN) law, which cuts personal income taxes starting January this year.

To offset, the agency was eyeing to boost its monitoring of businesses to ensure they are paying the correct taxes.

The TRAIN law, signed by President Duterte December last year, took effect since January 1 this year, imposing new excise taxes on cigarettes, sugary drinks, oil products and vehicles, among other goods, to compensate for the restructured personal income tax regime that raised the tax-exempt cap to an annual salary of P250,000. The excise taxes on the said goods were new levies, giving the government fresh sources of revenue.

The government was expecting that the new taxes on consumption compensated for the lower personal income tax rates under the TRAIN Law, which pulled down income tax collections so far this year.

For BIR-13, Pagulayan pointed out the TRAIN law had affected about "60%" of the agency's income tax collections.

While he urged businesses to pay the tight taxes, the BIR official noted that voluntary compliance has so far improved.

He added that increased purchasing power of consumers should boost up business profits, which should in turn reflect in the taxes businesses pay to the tax bureau.