The Bureau of Internal Revenue (BIR) reported that its tax collections have declined, attributing the slowdown to the lingering issues surrounding the Department of Public Works and Highways’ (DPWH) infrastructure projects.
‘I’m not sure if it can be attributed to the flood control issues. But there was definitely a slower collection because of the issue, because of the DPWH,’ BIR Commissioner Romeo Lumagui Jr. told reporters.
Data from the Bureau of the Treasury showed that BIR’s revenue increased by 11.4 percent to P2.14 trillion from January to August. The revenue target for the agency this year was adjusted slightly to P3.22 trillion from P3.23 trillion.
Finance Secretary Ralph Recto confirmed that the BIR’s collections have declined, cautioning that the continued downturn in revenues could serve as an early warning of slower economic growth.
‘There’s a slight reduction, but again, the most important thing is we will hit our revenue target this year. The BIR and the Bureau of Customs will miss their target a bit, like I said, it will be taken up by the non-tax revenue, ergo we will meet our target,’ he said.
Official data from the Bureau of the Treasury showed that BIR’s revenue increased by five percent for August alone to P250.1 billion from P238.1 billion in the same month last year.
With the statements from Lumagui and Recto, it is expected that BIR collections would decline in September. The BIR collected P174.7 billion in September 2024.
During his fourth State of the Nation Address on July 28, President Marcos ordered an audit of flood control projects under his administration, as he denounced the corruption that caused people to suffer from recurring flash floods during heavy rains.
An initial review found that 15 contractors bagged P100 billion worth or 20 percent of all flood control projects in the past three years.
Citing the preliminary report of the DPWH, Marcos said P545 billion in public funds went to flood control projects nationwide since July 2022.
Lumagui earlier told The STAR that the agency has yet to collect billions of pesos in taxes from online businesses operating across various digital platforms.
The BIR circular was issued ordering electronic marketplace operators to impose a one-percent withholding tax on their sellers and merchants to ensure proper tax compliance in online transactions.
The tax measure serves as a creditable expanded withholding tax, to be collected by online platforms where digital sellers conduct their business transactions.
‘Since tax herein involved being withheld is income tax, the burden of the tax is really upon the seller although the mode of payment of the tax is through withholding by the buyer, or by the e-market place operator or digital financial service provided, in case the payment for the sale of goods or services were made therein,’ the memorandum read.
It further states that the tax withheld is considered a part of the consideration agreed upon between the seller and buyer, resulting in a net take to the seller of only the difference between the agreed-upon consideration or selling price and the tax withheld.