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Dominguez expects gov’t revenues to pick up by 4th quarter

Finance Secretary Carlos Dominguez III said Monday he is optimistic that government revenue collections will improve by the fourth quarter of 2021, after they were affected by the COVID-19 pandemic last year.

“Definitely, we expect that by the last quarter of this year. We expect to start hitting the targets on our revenues,” Dominguez said in an online interview by CNBC.

“We have a very resilient economy. You have to remember that we entered this virus situation with very strong finances. We conducted a series of tax reforms, which boosted our revenues as well as our credit rating. Incidentally, our credit rating has not been affected by this virus,” he said.

Dominguez said the government increased fuel taxes and reduced the taxes to individuals. He said the government also implemented a sugary drinks tax and rice certification, which moderated the inflation rate.

“So our tax administration has also improved greatly. We did all of these, because we were doing our ‘Build, Build, Build’ program, which, incidentally, we are continuing. But this year, these reforms will help us weather the financial impact of this COVID virus,” Dominguez said.

The interagency Development Budget Coordinating Committee set a revenue collection target P2.88 trillion in 2021 and P3.31 trillion in 2022.  The government collected P2.84 trillion in 2020, or 0.4 percent short of the collection goal for the year and lower by 9 percent than the 2019 level.  It was also 19 percent short of the original pre-pandemic target.

The DBCC also revised its gross domestic product growth target in 2020 to a range of -8.5 to -9.5 percent.

The Bureau of Internal Revenue said it surpassed its revised 2020 revenue target through digitalization efforts and intensified campaign against delinquent taxpayers.

BIR Commissioner Caesar Dulay said in a report to Finance Secretary Carlos Dominguez III the agency collected P1.67 trillion, or 86 percent of the P1.94 trillion in total taxes it collected, coursed through electronic payment channels.

Dulay said 21.5 million or  94 percent of the 22.86 million  tax returns filed last year were done online, while only 1.38 million or 6 percent were filed manually, given the mobility restrictions

imposed by the government since March 2020  to curb the spread of COVID-19.

Data showed that of the P1.67 trillion collected through e-channels last year, P4.98 billion of the payments were from the additional digital system PayMaya, he said.

The P1.94 trillion collected by the BIR in 2020 was about 11.23 percent less than the actual collection of P2.19 trillion in 2019, but it was 15.14 percent over the revised 2020 goal of P1.68 trillion set by the DBCC.

About 4.37 million new business taxpayers registered with the BIR last year, representing  a 6.15-percent increase from the previous year’s 4.11 million.

Dominguez said the decrease in BIR collections in 2020 compared to the previous year was understandable, considering  the adverse economic impact of the pandemic and  the contraction of the gross domestic product by about 10 percent as of the third quarter of 2020.

“This coming year, I think, will be continuously challenging but I’m very happy the way BIR has responded to this crisis and had not given up,” Dominguez said following  Dulay’s report on the BIR’s 2020 performance.

“Basically, your collections went down almost exactly as the GDP contracted at around 10 percent. That’s about right. In other words, you haven’t let up on the pressure. The performance relative to 2019 is still the same even if the collections are lower.  It was lower because the GDP dropped. Please thank the team and keep it up,” Dominguez said.

Topics: Finance Secretary Carlos Dominguez III , revenue collections , COVID-19 pandemic
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