The Bureau of Internal Revenue (BIR) is tasked to collect over P2 trillion this year, covering more than half of the 2016 national budget, with most expected to be come from income and value-added taxes (VAT).
The collection target, set by the Department of Finance, is P2.025 trillion or 21 percent higher than 2015’s P1.674-trillion goal, according to a recently released revenue memorandum. Put another way, the tax bureau is expected to account for 67 percent of the P3.002-trillion national budget for the year.
The goal, an analyst said, is attainable if government revenue collections continue to improve.
“Historically, revenue collections have fallen short of target. But having said that, this should be attainable if collections are efficient, and I believe there has been marked improvement under President Benigno Aquino 3rd’s term,” said Justino Calaycay Jr., analyst at Accord Capital Equities Corp., said.
The big challenge beyond revenue goal is whether the economy can grow as projected, Calaycay said, noting that there are underlying assumptions such as gross domestic product growth, consumer spending, business investments, exports and overall economic activity.
“The revenue target should be seen against the backdrop of what the government’s spending program as outlined in the General Appropriations Act,” he said.
BIR operations or regular tax revenues, are programmed to contribute 97 percent or P1.969 trillion of the total collection goal, while the rest or P55 billion is expected to come from non-BIR operations’ collections or taxes imposed on government securities sold by the Bureau of Treasury.
Broken down, collections under the large taxpayers service are targeted to hit P1.230 trillion, while revenue from regional offices was programmed at P739 billion.
In terms of tax types, 61 percent or P1.243 trillion iex expected to come from income taxes, while VAT collections are expected to contribute P405 billion.
Excise taxes, meanwhile, are targeted to account for P170 billion; percentage taxes, P82 billion; and other taxes, P123 billion.
As of end-November 2015, the national government’s tax effort or tax collection as a percentage of GDP improved to 13.72 percent from 13.45 percent a year earlier.
In absolute terms, tax revenue in the 11 months to November rose by 7.2 percent to P1.670 trillion from the yearago level of P1.558 trillion, with the bulk or P1.327 trillion coming from BIR collections.