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OVERALL PERFORMANCE
Despite the continuing effect of the economic crisis,
the 1999 total internal revenue collection of P 341.320 B surpassed
1998 collections by P 4.14 B or 1.23%. Compared to the bureau's
goal or P 353.631 B, this year's total internal revenue collection
represented a 96.52 percent level of attainment.
As reported by the National Statistics Coordination Board (NSCB),
GCP for CY 1999 posted a 12.07% growth which is higher than the
10.15% growth recorded in 1998. However, economic growth is led
substantially by the least taxed sector, the agriculture sector
which posted positive growth of 16.36% compared to a negative 0.59%
growth in 1998. The taxable sectors lagged behind for most of 1999.
The service sector slowed down by registering a growth of 12.90%
this year compared to 15.74% growth recorded in 1998. Growth in
the industrial sector exhibited slight improvements from 7.87% in
1998 to 8.43% in 1999.
The BIR's share to the total National Government Tax Revenue of
P 478.502 B reached 71.33%
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BIR's
Share in National
Government Tax Revenues
CY 1999
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1993-1999
The Bureau realized a tax effort of 11.42%
in 1999.
COLLECTION BY MAJOR RESOURCES
Taxes on Next Income and Profit registered the
highest contribution at 53.92% to the total tax revenues followed
by Excise Taxes and Value Added Taxes at 18.10% and 16.16%
shares, respectively.
A. TAXES ON NET
INCOME AND PROFIT
The total collection from Net Income and Profit amounted to P 184.024
B. This surpassed the 1998 collection by P 0.110 B or 0.06% but
is short of goal by P 20.288 B or 9.93%.
As for corporate income taxes, the collection slightly increased
by 1.36% but fell short of goal by 13.66%. This could be attributed
to the unfavorable business climate brought about by the regional
currency crisis and high interest rates which resulted to a lot
of business establishments opting to close shop or to downsize.
Withholding on wages performed positively compared to goal by 5.10%
and previous year's collection by 16.41%. Changes made in the withholding
tax scheme followed by an extensive information drive on the withholding
tax system led to the increase compliance by the withholding agents.
Collection from capital gains tax this year decreased by 16.26%
over the 1998 collection and deficient by 26.84% compared to goal.
This is explained by the decrease in volume of transactions from
sale or real properties brought about by the implementation of Revenue
Regulations No. 13-99 (Tax Exemption of Principal Residence). This
year's number of tax returns filed from this source went down by
3,116 returns or 2.29% lower than the 1998 tax returns filed.
Final tax on bank deposits incurred an P 8.02 B or 31.86% deficit
compared to goal and a P 9.58 B or a 35.83% decrease, compared to
1998 collection. This is due to the fact that even with the increase
in the volume of deposits, corresponding average interest rates
decreased.
Although collection for Treasury Bills/Bonds surpassed its 1998
collection by 2.64%, it is deficient by 5.82% compared to goal.
The deficit in collection compared to goal was brought about by
the decrease in net sales of T-Bills. The Bureau of Treasury reported
a drop in net sales of T-Bills from P 43.319 B in 1998 to P 21.499
B in 1999.
B. EXCISE TAXES
Total Excise Tax collection of P 61.764 B exceeded its target by
P 0.596 B or 0.97% but slightly lower than the 1998 collection by
P 0.991 B or 1.58%.
It was noted that consumers of high
priced fermented liquors shifted to the comparatively lower priced
liquors such as gin, rhum and whisky. Thus, excise tax collection
from alcohol products declined by 8.07% compared to goal.
Revenues generated from tobacco products declined by 1.41% (P 0.236
B) compared to 1998. The current economic crisis greatly affected
the cigarette industry considering that cigarettes are usually considered
as luxury items (popularly known also as sin product). Tax collections
from high and meduim priced brand of cigarettes declined by 4.04%
compared to tax collections in 1998. Likewise, tobacco inspection
fee collections also declined by 65.50% over prior year's collection.
The drop in collection from petroleum products by 2.52% against
1998 collection is due to the effects of the oil deregulation law
which brought in more players to the local oil market. Excise taxes
on importations were credited to the Bureau of Customs. Several
manufacturing industries dependent on diesel products for their
machinery consumption have either closed or slowed down their operations
resulting to a decrease in collection of P 254 M or an equivalent
of 2.58%. Also, there was a decrease in excise tax collection from
removals of avturbo product on account of the tax exemption on sale
to international carriers under the Tax Code.
With regard to miscellaneous products, production and sales of locally
assembled automobiles went down by 5,498 units or 17.08%. It posted
a 6.81% decline in collection compared to 1998 but overshot its
target collection by 17.13%.
Mining and mineral products exceeded its target by 12.76%.
C. VALUE-ADDED TAXES
Value-added Tax collection of P 55.150 B registered an increase
of P7.611 B or 16.01% over last year's collection and overshot the
goal by P 1.651 B or 3.09%.
The positive performance of Value Added Tax (VAT) is partly due
to the intensified efforts to raise revenues from VAT with the "Humingi
ng resibo" raffle promo. Increase in VAT payments were also
due to the availment of Economic Recovery Assistance Payment (ERAP)
Program and the increase in volume of government money payments.
The improved collection in VAT is also attributed to the recovery
from the Asian economic crisis of certain sectors of the economy
which are VATable. For instance, the manufacturing sector managed
to grow from 7.9% in 1998 to 9.8% in 1999 in nominal terms. The
food subsector, comprising more than a third of total manufacturing,
contributed much to the VAT increase with its 14.2% growth. The
favorable performance of other VATable sectors such as transport,
communication and storage, trade and the retail sector growing at
13.8%, 15.2% and 16.3% respectively, had positive impact on VAT
collections.
D. OTHER PERCENTAGE TAXES
Collections from Other Percentage Taxes (OPT) increased by P 1.716
B or 8.44% compared to 1998 and overshot its target by P4.721 B
or 27.26%.
Collection from amusement taxes, insurance premiums and other percentage
taxes registered positive growths of 6.28%, 64.59% and 92.54%, respectively,
from previous year's collection The volume of returns from Insurance
Premiums filed during the year increased by 372.40% compared to
previous year due to the continuing awareness on the importance
of insurance services, especially on health coverage.
The decrease in the lending rates from 18.35% in 1998 to 11.78%
in 1999 contributed to the decline of 30.47% in collections from
financial institutions compared last year. Banks had no choice but
to bring down the cost of loanable funds to encourage loan borrowings
and stimulate demand. As reported by the National Accounts, the
after effects of the financial turbulence in the Asian economies
were evident in the slow growth posted by the financial sector at
8.5% this year from 13.8% in 1998. Banking activities which contributed
more than 70% of the financial sector declined from 14.1% in 1998
to 7.5% in 1999. The insurance and non-bank sectors posted 12.3%
and 8.6% growth in nominal terms, respectively.
E. OTHER TAXES
Collections from Other Taxes exceeded the goal by P 1.009 B or 5.82%
but declined by P 4.303 B or 19.00% of last year's collection. Only
transfer taxes exceeded its goal and previous collection by 50.32%
and 20.94%, respectively, due to the increase in the number of tax
returns filed from 38,161 filers last year to 39,492 filers this
year.
Although documentary stamp tax collection exceeded its target by
18.21%, a decline by 17.82% against last year's collection was recorded.
COLLECTION BY REGION
Total Regional Collection for CY 1999
amounted to P 341.16 B which is P 3.52 B or 1.04% more than that
of BY 1998 and P 12.37 B or 3.53% short of this year's goal of P
353.63 B. Revenue Region (RR) No. 8 (Makati) generated P 127.75
B representing 37.45% of the total regional collection. RR No. 7
(Quezon City) and RR No. 6 (Manila) followed with 19.61% and 15.16%,
respectively. The combined efforts of these three regions generated
72.22% of the total CY 1999 regional collection. The remaining 27.78%
was shared by the other sixteen (16) revenue regions led by RR No.
9 (San Pablo City), RR No. 4 (San Fernando, Pampanga), RR NO>
13 (Cebu City) and RR No. 5 (Valenzuela) with 11.33%, 5.19%, 2.59%
and 2.41% contributions, respectively.
Three (3) out of nineteen (19) revenue
regions surpassed their assigned goal for CY 1999. Revenue Region
No. 12 (Bacolod City) registered the largest percent of excess over
target at P 1.21 B or 46.28%. The other two regions which posted
percentage excesses are RR No. 17 (Butuan City) at 6.16% and RR
No. 11 (Iloilo City) at 0.02%. Percentage deficits posted by the
sixteen (16) other regions ranged from 0.05% to 15.09%.
Compared to previous year's collection,
eight (8) out of nineteen (19) regions increased their collection
for CY 1999. Increases in collections ranged from 11.39% for RR
No. 17 (Butuan City) to 0.01% for RR No. 16 (Cagayan de Oro City).
Decreases in collections experienced by the eleven other regions
ranged from 0.30% to 10.99%.
COLLECTION BY REVENUE REGION
CY 1999 (In Billion Pesos)
COLLECTION BY MANNER OF PAYMENT
Cash collections from voluntary payment amounted to P 339.53 B in
CY 1999 representing 99.52% of the total BIR collections. This year's
collection from voluntary payment showed a P 4.15 B or 1.24% increase
from that of CY 1998 collection of P 335.38 B. This improvement
may be traced to the continuing tri-media information campaigns,
strict monitoring of Large Taxpayers and the availment of the Economic
Recovery Assistance Payment (ERAP) Program per Revenue Regulations
No. 2-99.
Collection generated from preliminary/final assessments and delinquent
accounts amounted to P 1.54 B and P 0.08 B, contributing 0.45% and
0.03%, respectively, to the total collections.
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