The Bureau of Internal Revenue (BIR) fell short of its tax collection for the first quarter of the year by 8.9 percent or about P47.2 billion after businesses utilized their input value-added tax (VAT) credits under the Tax Reform for Acceleration and Inclusion (TRAIN) Law.
In a report to Finance Secretary Carlos Dominguez III, the BIR said collections from January to March only reached P485.4 billion, which was below the P532.6 billion target set by the Development Budget Coordination Committee (DBCC).
Despite the shortfall, BIR Deputy Commissioner Arnel Guballa said first-quarter tax collection is still higher by P32.4 billion or 7.2 percent from the P452.9 billion collected for the same period last year.
Before 1 January this year, the Tax Code requires that input VAT from purchased capital goods with higher than P1 million aggregate acquisition cost should be spread out for 60 months beginning in the month of purchase.
However, with the outright crediting of input VAT by businesses, Guballa said the BIR incurred a shortfall of P17.4 billion in VAT collections and another P9.4 billion in income tax collections for the first quarter of 2022 alone compared to the DBCC-set targets.
On the other hand, the Bureau’s collections from its non-BIR operations from January to March 2022 reached P18.1 billion, bringing its total collection for this period to P503.5 billion.
The BIR has been in the news over the weekend after Dominguez ordered it to stop special audits like those against property giant Megaworld Corporation.
The Department of Finance said that such audits, despite being authorized by the BIR commissioner, have resulted in overlapping investigations of companies.
Acting on Dominguez’s order, BIR officer-in-charge Marissa Cabreros on Friday ordered all revenue officers nationwide to stop the investigations of audit task forces.
The task forces were created under revenue special orders and operations memoranda that Cabreros’ memorandum suspended.