Value-Added Tax (VAT) collections totaled P50.78 billion in the first four months, higher by almost 10% than last year’s P46.2 billion but below the target of P57.76 billion, Bureau of Internal Revenue (BIR) data showed.

BIR Deputy Commissioner Nelson M. Aspe admitted that the global downturn, which has caused job losses and closures worldwide, has placed a dent on their collections. He, however, claimed that the bureau’s enforcement activities are already taking effect as shown by the higher VAT collections.

"The VAT collection is keeping the BIR afloat amid the slowdown. The higher VAT is not due to a good business condition but due to enforcement activities like the Oplan Kandado," he said in an interview.

Under the bureau’s Oplan Kandado program, business establishments caught understating their tax dues will be padlocked until they settle their liabilities.

In 2005, Congress, amid opposition from various sectors, passed the Reformed Value Added Tax law which allowed the President to raise the VAT rate to 12% from 10%. The measure is part of the government’s fiscal measures that seek to raise revenues and to limit the budget deficit.

VAT collections, the second largest source of tax revenues, and percentage tax are the only tax types that yielded higher collections year on year from January to April.

Income tax collections, the largest source of tax revenues, totaled P144.61 billion, down by 8.13% from P157.41 billion and P5.72 billion short of the P149.68 billion goal.

Excise tax collections, meanwhile, totaled P16.84 billion, lower by 9.3% from P18.67 billion and P1.02 billion short of the P17.86-billion target.

Percentage tax collections reached P15.31 billion, up by 12.98% from P13.55 billion and P1.18 billion higher than the P14.13-billion goal.

Collections from other taxes amounted P14.31 billion, down 35.38% from P22.14 billion and lower by P2.88 billion than its P17.19-billion target.

Mr. Aspe said they will continue to boost their enforcement programs to improve taxpayer compliance and to run after tax cheats.

He added that these would enable them to make up for the lower revenues due to the slowdown in business activity.

Expectations of lower revenues due to the economic slowdown has prompted the government to raise this year’s deficit cap to P199.2 billion or 2.5% of the gross domestic product from P177.2 billion previously.

The BIR, which accounts for the bulk of the government’s tax revenues, missed its P810-billion target last year, collecting only P778 billion.

It collected P241.8 billion from January to April, lower than the P258 billion collected in the same period last year. The tax bureau is required to collect P850.6 billion this year.