BIR fears lower tax collection this year due to TRAIN law

With the new tax mechanism or the TRAIN law in place, BIR is anticipating a decrease on compensation taxes because of the exemptions put in place.

The Bureau of Internal Revenue (BIR) unit in Palawan admitted recently it is facing a tall order in accomplishing a collection target of P3.6 billion this year set for them by central authorities, because of an anticipated decline in compensation taxes resulting from the administration’s new taxation reform policy.

Revenue District Officer (RDO) Vicente P. Gamad of the BIR-District 36 said they will have to work “double time” to meet their target. He explained that the net effect of tax collection below their set target is a corresponding decrease in the internal revenue allocation of the province.

With the new tax mechanism or the TRAIN law in place, Gamad said they are anticipating a decrease in compensation taxes because of the exemptions put in place. To counterbalance this, he said they plan to double up their efforts on collecting real property taxes and transactions.

“Yan ang kinatatakot namin dito sa BIR, ang effect at ang baba sa compensation taxes dito sa atin. Saang klaseng tax natin yan hahabulin?,” he said.

“We will have to really monitor the tax compliance of all taxpayers in Palawan. Hopefully, collection from real property transactions will increase due to the implementation of the new zonal values,” he said.

Gamad said that they had been able to exceed their 2017 collection target by around P263 million. The district’s target for last year was P2.8 billion, while its collection exceeded a little over P3 billion.

“Lagpas tayo ng P 263 Million,” he said.

If in case a district office fails to hit its target, the Internal Revenue Allotment (IRA) share of the locality will be affected, according to Gamad.

“Yung IRA kasi affected yan, malaki ang collection namin, mas malaki rin ang IRA share na makakuha ng Palawan,” said Gamad.

He said that based on the 2017 figures, their office’s collection for compensation taxes ranges from P 230 Million to P 250 Million for the entire province of Palawan.

“Hindi ko pa nakikita ang epekto ng TRAIN, makikita ko pa lang yan sa Marso, pagpasok ng mga collections, kung gaano kalaki ang epekto, at kung gaano kalaki ang mawawala”.

Gamad said that he will also seek the help of the local government units on the information regarding new businesses operating in their localities to increase the tax base of the revenue district office.

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