GOVT LOSES P125 BILLION IN POTENTIAL TAX REVENUES IN JANUARY-JULY
MANILA, September 1, 2009 (STAR) The government lost P125 billion in potential tax revenues from January to July this year as a result of an economic slowdown and the implementation of several tax relief measures, a ranking finance official said.
In an interview with reporters, Finance Undersecretary Gil Beltran said the Bureau of Customs (BOC) failed to collect P75.4 billion due to lower import volumes while the Bureau of Internal Revenue (BIR) lost P49.8 billion on account of the implementation of discretionary measures and lower interest rates.
He said the missed P74.7 billion in potential collections due to reduced oil imports and another P700 million due to lower import duties. The country’s merchandise imports plunged 32 percent in the first half of the year, official government data showed.
The BIR – the state’s biggest revenue generating agency - lost P33.9 billion due to the implementation of revenue-eroding measures led by the Tax Relief Act under
Republic Act 9504, the rollback of the minimum corporate income tax to 30 percent from 35 percent under the Expanded Value Added Tax Act or RA 9337, and the shift to franchise tax on electricity transmission.
The agency also lost P8.2 billion due to non-recurring transactions such as tax backpayments by the Bangko Sentral ng Pilipinas and the one-time tax amnesty last year, as well as another P7.7 billion due to lower-than-expected interest rates.
Beltran said the additional revenues from positive factors, including the stronger-than-expected gross domestic product (GDP) growth in the first half and lower-than-expected foreign exchange rate, were not enough to offset foregone revenues from negative factors.
The higher-than-expected nominal GDP in the first semester yielded P25.6 billion for the BIR while the peso to the dollar exchange rate raised P16.6 billion.
The Finance Department sees tax revenues inching up 3.1 percent to P1.082 trillion this year from P1.049 trillion last year. The tax take of the BIR is expected to increase 2.6 percent to P798.5 billion from P778.6 billion while that of the BOC is expected to go up 5.03 percent to P273.3 billion from P260.2 billion.
The government’s tax revenues, however, fell 5.4 percent to P569.2 billion in the first seven months of the year from P601.7 billion in the same period last year. The BIR’s tax take fell 4.4 percent to P433.2 billion from P453.2 billion while that of the BOC plunged 9.2 percent to P129 billion from P142 billion. – Iris Gonzales
Chief News Editor: Sol Jose Vanzi
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