Covid-19 cuts BIR, BoC collections

April 28, 2020

Total collections of the Bureau of Internal Revenue from January to mid-April this year dived further to P480.64 billion, which is P226.15 billion or 32 percent below what it collected for the same period last year, as a result of the community quarantine measures in Luzon and other parts of the country that have also prompted the agency to extend the deadlines for the filing and payment of income and other taxes to next month.

Preliminary data submitted by the BIR to the Department of Finance  showed that actual collections from Jan. 1 to April 17 is short of P398.54 billion or 45.3 percent of the target of P879.18 billion for the Jan. 1-April 15 period.

As for the Bureau of Customs, preliminary data show actual collections dipping further to P160.98 billion for the period of Jan. 1 to April 15, which is P3.42 billion or 2.08 percent lower than the amount of P164.4 billion collected in the same period last year.

The Jan. 1-April 15 collection of the BOC is also P32.91 billion or 17 percent short of the target of P193.89 billion for this three-months-and-a-half period.

Thus, the collection of both the BIR and BoC combined from Jan. 1 to April 17 reached only P641.62 billion, which is P431.45 billion or 40 percent short of the target of P1.073 trillion for that period.

The P641.62 billion collected is also P229.56 billion or 26.3 percent lower than the amount of P871.19 billion collected in the same period last year.

The BIR, which accounts for 78 percent of the state’s tax collection capacity, reported even more discouraging numbers for the April 1-17 period, with collections reaching only P25.01 billion, or just 8.66 percent of its target of P288.75 billion for the entire month.

Compared to the April 2019 actual collection of P237.93 billion, the amount collected from April 1 to 17 is 89.5 percent short.

When the Luzon-wide enhanced community quarantine  being implemented to contain the spread of the 2019 coronavirus disease was stretched by President Duterte to April 30, and other provinces also imposing similar containment measures, the BIR had to move anew the filing and payment of income tax returns from the original extension date of May 15 to May 30.

The submission of attachments to electronically filed ITRs was also extended to June 15.

The BIR also moved the deadline for the filing and payment of the monthly value-added tax returns for February and March 2020 to May 6 to 10 and May 21 to 25, depending on the category of the taxpayer.

The quarterly VAT filing and payment for the fiscal quarter ending February 29 has been extended to May 10 and the fiscal quarter ending March 31 extended to May 25.

These extensions as well as the adjusted dates for periods on the filing and payment of other tax returns, claims for VAT refunds and other tax-related concerns were issued by the BIR last April 14 through Revenue Regulations (RR) 10-2020.

The BIR has not yet announced whether it would issue new adjustments to the deadlines after President Duterte extended the ECQ anew in Metro Manila and other provinces to May 15 and relaxed the quarantine in other parts of the country.

In the BoC, collections from April 1 to 15 amounted to P15.57 billion, which is P6.96 billion or 30.89 percent below its collection of P22.53 billion in the same period last year.

It is also P11.63 billion or 42.76 percent lower than the April 1-15 target of P27.2 billion.

For April 1 to 15, the combined BoC and BIR collections totaled only P40.57 billion, which is P219.88 billion lower than the amount collected for the same period last year.

It is also P275.37 billion lower than the combined BIR and BoC target of P315.95 billion for that period.

Excise tax collections of the BIR across all product categories also posted large losses, with actual payments amounting to only P76.47 billion for the Jan. 1-April 15 period, which is P37.76 billion or 33 percent lower than the 2019 figure of P114.23 billion.

The BIR’s excise tax collection target for this period was P161.84 billion.

The consistent large excise tax collection drawers—tobacco and alcohol—recorded significant declines in collections.

Excise tax collections from tobacco for the Jan. 1-April 15 period totaled only P33.19 billion, which is P24.56 billion or 42.5 percent below last year’s P57.75 billion collection.

The Jan. 1-April 15 excise tax collection from alcohol products reached only P17.85 billion, which is P6.24 billion or 26 percent lower than the collection of P24.09 billion for the same period in 2019.

Finance Sec.  Carlos Dominguez III earlier assured the Filipino people that even with the significant decline in both bureaus’ revenue collections, the country remains “financially able” to meet the unexpected challenges of the COVID-19 pandemic because President Duterte has ordered economic managers since the beginning of his administration in 2016 to maintain fiscal discipline and exercise prudence in state spending,

As result of these conservative fiscal policies, Dominguez said the government has been able to roll out a four-pillar socioeconomic strategy to defeat Covid-19, which would involve budgetary, fiscal and monetary measures with a combined value of P1.49 trillion or around 8 percent of the country’s gross domestic product.

The components of the four-pillar strategy are: [1] the emergency support for poor and low-income households, small businesses and their employees, and other vulnerable groups; [2] the marshalling of medical resources to combat Covid-19 and ensure the safety of health frontliners; [3] fiscal and monetary actions to finance emergency initiatives and keep the economy afloat; and 4) an economic recovery plan to create jobs and sustain growth.