Gov’t eyes more VAT, excise taxes this year as economy rebounds

The government has set higher goals this year for value-added and excise tax collections — major components of the country’s tax revenues — on the back of the recovering economy. The government expects the economy to grow by 2.6–3.6 percent this year from 0.9 percent last year, when the global economic slump reached its height. While it is normal for the government to target higher collections each year, "tax revenues, specifically VAT, [are] directly correlated to economic growth," Finance Assistant Secretary for Fiscal Policy and Planning Ma. Teresa S. Habitan said via text at the weekend. The government has set a P199.2-billion goal for VAT this year, more than half more than the P168.2-billion target last year, a document from the Finance department showed. The Bureau of Revenue’s VAT collections, which account for the bulk of the total VAT take, reached P163.62 billion last year. The government has likewise set a slightly higher collection target for excise tax this year at P61.7 billion, against a P60.5-billion goal last year. The bureau collected P60.7 billion in excise taxes last year. The government expects to collect P22.3 billion in excise taxes on alcohol products, P1.7 billion more than a year earlier; P1.2 billion more for tobacco products at P25.4 billion; and P120 million more for automobiles at P2.14 billion. On the other hand, excise taxes on fuel products will go down by P1.9 billion to P10.8 billion this year. — BusinessWorld