MANILA, Philippines — The national government has experienced a 10.8 percent increase in revenues for the first five months of the year ending in May. However, Finance Secretary Benjamin Diokno emphasizes the need for improved tax collection efficiency. Revenues during this period amounted to P1.59 trillion, compared to P1.44 trillion in the same period last year. Tax intake alone saw a growth of 9.7 percent, reaching P1.4 trillion from P1.29 trillion.
During a briefing on Friday, Diokno explained that the collection of value-added tax (VAT) is significantly lower than its potential revenue due to factors such as the prevalence of fake receipts. The Bureau of Internal Revenue (BIR) is currently cracking down on this issue, with BIR Commissioner Romeo Lumagui Jr. filing criminal cases against buyers or clients of a fake receipts syndicate. These syndicates establish “ghost” companies that sell original receipts to individuals, allowing them to decrease their tax liabilities. The estimated loss in tax revenues due to fake receipts is P17.9 billion.
Diokno further stated that the government is reviewing VAT exemptions to enhance collection efficiency and expand the tax base. Despite having the highest VAT rate in neighboring countries at 12 percent, VAT collection is only at 40 percent of the potential total VAT revenues. A World Bank study in 2018 revealed that forgone revenues from VAT exemptions and incentives could reach up to P539 billion annually. Currently, there are 29 transactions exempt from VAT, mainly encompassing social goods and services such as agricultural and marine food products, education, health services, and financial services. The government intends to examine areas with excessive exemptions to further broaden the tax base.
In conclusion, the national government has seen an increase in revenues, but there is a pressing need to improve tax collection efficiency. Efforts are being made to combat the issue of fake receipts and review VAT exemptions to maximize revenue potential and broaden the tax base.
Denial of responsibility! VigourTimes is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
