The government’s tax effort eased to 12.8 percent in the first quarter of the year due to the change in the timing of value added tax (VAT) declaration and collections, from monthly to quarterly.
According to data from the Department of Finance, the tax effort for the first three months of 2023 is lower than the 14.2 percent recorded in the same period a year ago.
The Bureau of Internal Revenue’s (BIR) collection effort was nine percent in the first quarter, down from the 10.2 percent recorded year-on-year.
Meanwhile, the Bureau of Customs’ effort remained the same at 3.8 percent.
As a result, the government’s revenue effort was lower at 14.6 percent in January to March this year compared to the 15.9 percent revenue effort in the first quarter of 2022.
“What we should consider is there’s a change in… the timing of the collection of VAT. It’s now quarterly (instead of monthly),” Zeno Ronald Abenoja, finance undersecretary, said in a press conference late Friday.
“We have to look at April numbers. So far, when we look at April numbers, the advance numbers we have, it will show the collection has actually improved relative to last year,” he added.
Earlier this month, the Bureau of the Treasury (BTr) reported that the BIR’s collection for March slipped by 17.27 percent year-on-year to P141 billion. This resulted in total revenue collections for March being 11.99 percent down from the previous year’s level, amounting to P258.7 billion.
The BTr said the slower outturn for the period was due in part to the impact of the transitory provisions of the Bureau’s Revenue Memorandum Circular No. 5-2023 in line with Section 37 of the TRAIN Law.
VAT-registered taxpayers are no longer required to file the monthly VAT declaration for transactions starting Jan. 2023, but will instead file the quarterly VAT return within 25 days following the close of each taxable quarter when the transaction transpired. – Angela Celis
