Tax collections in the first semester fell short of the government’s target by P16.6 billion as weaker infrastructure spending and softer consumption amid the oil-price shock weighed on several major revenue streams.
The Development Budget Coordination Committee’s (DBCC’s) latest midyear report showed that tax revenues rose 5.4 percent to P2.14 trillion in the first half from P2.03 trillion a year earlier. However, collections fell short of the P2.16-trillion midyear program by P16.6 billion.
The shortfall was largely due to the Bureau of Internal Revenue (BIR), which collected P1.65 trillion but missed its target by P22.6 billion after growth in several major revenue streams slowed to single digits.
‘The oil price shock affected the consumption of Filipinos. This is evident in the collections of consumption taxes such as the VAT and excise tax,’ the DBCC said.
Withholding taxes, including those on corporate and personal income, contributed to the weaker performance, with net income and profit-related tax collections growing by only 6.3 percent to P901.7 billion, down from the 13.3-percent growth a year earlier.
Value-added tax collections increased 6.5 percent to P360.7 billion, slower than the 15-percent growth recorded a year earlier, while excise tax collections dropped 4.3 percent to P156.1 billion from 16.3-percent growth last year.
Taxes on bank deposits and percentage taxes on banks and financial institutions declined by 26.8 percent and 23.7 percent, respectively, while documentary stamp tax collections fell 2.9 percent.
Meanwhile, the BOC exceeded its target by P7 billion after collecting P491.9 billion against a P484.8-billion goal.
The stronger customs collections were partly supported by a weaker peso and higher global oil prices, which increased the peso value of imports and, consequently, import-related tax collections.