VAT revenues up last year despite missed collection target

Value-added tax (VAT) collections rose last year despite a sluggish economy but these were not enough to allow the Bureau of Internal Revenue (BIR) to meet its target for 2009, data showed. Sales tax revenues reached P163.62 billion last year, 17 percent higher than in the prior year. The BIR traced the increase to better tax enforcement. "Oplan Kandado is one of those [measures]. Massive campaign and other enforcement activities such as surveillance, stock-taking and tax compliance verification drive [made this possible]," Marina C. de Guzman, chief of staff of BIR Commissioner Joel L. Tan-Torres, said in a text message on Sunday. But other tax types fell due to tax cuts passed by Congress and the impact of recent storms. "Tax-eroding measures are the reason [for the decline in the collections from other types of taxes]. Typhoons Ondoy and Pepeng also caused a capital loss of about P21 billion," de Guzman said. Income tax, the biggest source of tax revenues, dropped by a tenth to P434.44 billion, while excise tax collections slid by 1.16 percent to P60.7 billion last year. The latter is imposed on goods made here for local consumption, as well as on imported goods. On the other hand, percentage tax revenues improved slightly to P43.05 billion from P40.81 billion in 2008. Percentage tax is levied on entities that sell or lease goods, properties or services whose gross annual sales or receipts do not exceed P550,000 and are not VAT-registered. Collections from other taxes — capital gains, documentary stamp, donor's and estate taxes — fell by almost a fifth to P43.45 billion last year. Overall, the BIR collected P745.26 billion last year, 4.28 percent lower than the a year earlier. It was also P53 billion short of the P798.45-billion goal for last year. BIR officials earlier said they would continue to enforce existing programs to meet their P830-billion goal this year, as well as encourage taxpayers to pay the right taxes. One of these programs is Oplan Kandado, which shuts down businesses that do not pay the right taxes or fail to issue receipts. Erring businesses can only reopen once they pay their tax dues. The government has closed about 400 establishments nationwide. Another priority program of the bureau this year include forging partnerships with other state agencies to widen the tax base.