BIR misses anew VAT collection target
The national government missed its revenue collection goal on the controversial value-added tax (VAT) last year despite the nation’s consumption-driven economy, data from the Department of Finance (DOF) showed.
Based on the DOF data prepared by the Bureau of Internal Revenue (BIR), the government raised billion in VAT last year, lower by 14 percent compared with billion target for the period.
The national government actual VAT collection in 2014 is also below by 10 percent against the emerging revenue estimates by the finance department last September.
However, the BIR’s actual collection from the 12-percent VAT is higher by 11 percent than the billion in taxes raised in the previous year.
The lower than expected VAT collections in 2014 came in the wake of DOF’s order to the BIR to zero in on consumption tax.
Finance Secretary Cesar V. Purisima earlier explained that since the Philippines is a consumption-driven economy, the growth in VAT collection should be close to the growth of the country’s nominal gross domestic product (GDP).
In 2013, the government VAT collections were also below target by 7 percent to billion against the billion target.
Purisima noted that VAT collection grew only by 19 percent from 2009 to 2012, or at a slower pace compared with the Philippine economy’s GDP in nominal terms.
Data from the Philippine Statistics Authority showed that the country’s GDP in nominal terms, which is not adjusted for the effects of inflation, grew nearly 32 percent to trillion in 2012.
“I think the increase in VAT collection during 2009, 2010, 2011 and 2012 should be higher than 19 percent because our economy grew significantly during that period, so I believe there’s room for improvement here,” Purisima told reporters.
In 2012, BIR Commissioner Kim S. Jacinto-Henares ordered for a review of the VAT paid by large and Metro Manila’s taxpayers, a move to make sure that they have complied and remitted rightful taxes to the government.
Jacinto-Henares explained that the BIR decided to conduct a VAT audit after she noticed that for the past several years the tax agency had constantly failed to meet its VAT collection goals.