BIR excise tax collection exceeds target in Jan-Feb

The Bureau of Internal Revenue (BIR) generated P44.49 billion in excise taxes in the first two months of the year, exceeding its target for the period due to the implementation of the new tax reform law, the Department of Finance (DOF) said yesterday.

In a statement, the DOF said total excise tax collections from January to February reached P44.49 billion, 15.5 percent higher than the P38.53 billion target.

This also represented a 74.23 percent jump from the P25.53 billion excise taxes collected in the same period last year.

“The adjustments in the excise tax rates under the Tax Reform for Acceleration and Inclusion Act (TRAIN) for automobiles, minerals, alcohol, and tobacco led to surpassed collection goals for these products over the January-February period,” the DOF said.

Bulk or P24.04 billion of the total excise tax collections as of end-February came from the tobacco industry. This was 61 percent higher than the BIR’s goal of P14.93 billion, and 74.33 percent up from the actual collection of P13.79 billion in the same two-month period last year.

Alcohol excise taxes amounted to P9.82 billion, surpassing the P8.31 billion target by 18.17 percent.

Excise tax collections from automobiles reached P810.31 million, exceeding the target of P643.86 million, while collections from minerals amounted to P464.23 million as against P307.64 million goal.

Petroleum excise taxes totaled P4.79 billion while excise taxes from sweetened beverages amounted to P4.53 billion, and non-essentials (P15.65 million).

Finance Secretary Carlos Dominguez III said the overall tax collections of the BIR rose 10.84 percent to P280.69 billion. This is 16 percent higher than the agency’s P242.14 billion target for the period.

Republic Act 10963 or the TRAIN Act took effect on Jan. 1, 2018. It aims to simplify the country’s tax system by lowering personal income tax rates.

It also seeks to adjust excise taxes of fuel, automobile, coal and sugar-sweetened beverages, and expand the tax base by removing value-added tax exemptions, among others.

According to DOF estimates, the law is expected to generate an additional P89.9 billion in revenues for the first year of its implementation.

Meanwhile, Dominguez, in a message to tax administrators from various Asian countries, cited the significance of ensuring tax policies in the Asia-Pacific region are harmonious to prevent corporations from getting away with tax evasion.

“As economic boundaries begin to fade in the face of globalization, and as corporations inevitably expand their operations to straddle political borders, it becomes urgent for countries and jurisdictions to constantly update policies and practices in order to prevent tax evasion,” Dominguez said.

“Governments are dependent on revenues. Globalization of business operations should not serve as a means to defraud governments or avoid liabilities,” he added.

Dominguez also emphasized the need to constantly develop human resources, and to utilize advances in information technology.

“All of us should soon move to more intensive digital governance to ease the burdens of compliance and provide fast and efficient delivery of taxpayer service. It is important that we exchange notes on data analytics and best administrative practices,” Dominguez said.