Cumulative collections by the Bureau of Internal Revenue from January and February 2011 have reached a total Php127.99 billion. Compared to its cumulative target of Php128.97 billion, actual collections of the BIR are behind by Php981 million or by only negative 0.76%.
Compared to the same period last year, when the BIR collected a total of Php115.58 billion from January to February 2010, this year’s actual cumulative collections are ahead by Php12.40 billion for a positive growth of 10.73%. It may be recalled that January 2011 actual collections surpassed the target for the same month by Php2.5 billion or 3.6%.
For the month of February 2011, the BIR collected Php53.42 billion in tax revenues. Compared to the month’s target of Php56.99 billion, actual tax collections are behind by Php3.57 billion or by about negative 6.3%.
Compared to the collections in February last year when the BIR generated Php50.97 billion, this year’s actual collections are ahead by Php2.44 billion for a positive growth of 4.79%.
Overall, the Bureau’s collections may be broadly divided into taxes generated as a result of BIR operations, such as income taxes and VAT that it levies from business and other taxpayers, and taxes resulting from non-operations such as taxes withheld from the trade of Treasury Bills and Bonds by the Bureau of Treasury. Taxes generated by the former (operations) are ahead of target by Php535 million, taxes from non-operations of the BIR are still behind target by Php1.52 billion for the period January to February 2011.
As a rule, the government borrows (through loans from the private sector by floating T-Bills/Bonds and from bilateral or multilateral sources) to supplement its funds generated through taxes. The urgency to borrow diminishes as tax collections increase, and vice versa.
“Unfortunately for the BIR, when the Treasury borrows less, even as it may signal a stronger financial position of the government, this has a direct negative effect on our collections” according to BIR Commissioner Kim Henares.