Tax collections by the Bureau of Internal Revenue rose 7.2 percent in the first quarter from a year ago, but fell short of the government’s target.
Data showed the BIR tax collections amounted to P485.4 in the three-month period, up P32.4 billion from the P452.9 billion it raised in the same period last year.
The BIR said in a report to Finance Secretary Carlos Dominguez III its first-quarter performance fell P47.2 billion or 8.9-percent short of the P532.6-billion target set by the interagency Development Budget Coordination Committee for the period, as many businesses availed of the provision allowing outright crediting of input value-added tax on capital goods under the Tax Reform for Acceleration and Inclusion Law.
BIR deputy commissioner Arnel Guballa said the shortfall was due to businesses deciding to fully utilize their input VAT credits on purchases available to them under Section 35 of the TRAIN Law.
He said prior to Jan. 1, 2022, the Tax Code requires that input VAT from purchased capital goods with an aggregate acquisition cost of P1 million and above should be spread out over a period of 60 months beginning the month of purchase.
Guballa said that with the outright crediting of input VAT by businesses, the BIR incurred a shortfall of P17.4 billion in VAT collections and another P9.4 billion in income tax collections in the first quarter, compared to the DBCC-set targets, Guballa said.
Collections from non-BIR operations reached P18.1 billion in the first quarter, bringing its total collection for the period to P503.5 billion.
The total collection was higher by P33 billion or 7.0 percent from last year’s actual first-quarter collection of P470.5 billion, but lower by P48.3 billion or 8.8 percent than the DBCC target of P551.78 billion.
Guballa said compared to last year’s collected amount of P97.9 billion in the first quarter, the BIR’s collection this year of P113.5 billion from VAT was P15.6 billion or 16 percent higher.
Meanwhile, the BIR, upon the orders of the Department of Finance, suspended revenue special orders and operations memoranda creating special audit task forces to prevent duplication of functions of BIR offices and avoid confusion among taxpayers.
BIR officer-in-charge and deputy commissioner Marissa Cabreros issued a memorandum suspending immediately the RSOs creating the special audit task forces on real estate developers and direct selling/multi-level marketing and the operations memoranda creating task forces for Philippine offshore gaming operators and electronic sabong until further notice.
“The functions and responsibilities of the different units in the BIR are provided in revenue administrative orders issued by the secretary of Finance, upon the recommendation of the commissioner,” Secretary of Finance Carlos Dominguez III said.
“The issuance of the RSOs and OMs has distorted this and even caused uncertainty for some taxpayers,” Dominguez said.
The DOF said in the directive to the BIR that all audits and investigations under the RSOs and OMs should be handled by the revenue district offices or unit/s in the BIR where the concerned taxpayers are registered.
“We are working with the BIR to review these issuances and ensure these do not create redundancies and cause taxpayer confusion,” Dominguez said.
“If found to be in violation of our RAOs, these issuances should ultimately be revoked by the BIR,” he said.
All field audit and other field operations under the task forces authorized to conduct examinations and verifications of taxpayers’ books of account, records and other transactions were also ordered suspended.