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Thursday, December 7, 2023

Tax collection fell in August, gov’t budget deficit widened

The government’s budget deficit widened by 84.63 percent in August to P133 billion from P72 billion in the same month last year on lower revenue collection and higher expenditures, Finance Secretary Benjamin Diokno said over the weekend.

Data showed that revenue collection fell 6.58 percent or P21.9 billion to P310.6 billion in August from a year ago, while expenditures increased 9.66 percent or P39.1 billion to P443.6 billion.

Diokno said the lower revenue collection in August could be linked to inclement weather and the shift in value added tax collection. “The explanation was that I think their collection days were reduced because of inclement weather, which caused the suspension of classes because of typhoons,” he said.

“On personal income tax this year, we lost something like P70 billion, which is provided for under the TRAIN [Tax Reform for Acceleration and Inclusion] Law…We are not collecting [like] the usual because we cut personal income tax,” he said.

Data showed that despite the decline in August, cumulative revenue in the first eight months reached P2.6 trillion, up by 9.03 percent or P213.9 billion year-on-year. It also represented 69 percent of the P3.7 trillion program for the year.

The Bureau of Internal Revenue’s (BIR) tax collection dropped 6.73 percent in August to P213.5 billion from P228.9 billion a year ago, while the Bureau of Customs’ (BOC) collection declined 4.92 percent to P75 billion from P78.9 billion.

The BIR collected P1.7 trillion in the eight-month period, surpassing the previous year’s outturn by 9.43 percent or P147.0 billion. This made up 65 percent of the full-year target of P2.6 trillion.

BOC increased its cumulative revenue by 3.99 percent to P581.5 billion from P559.2 billion raised in the eight-month period of 2022. BOC reached 67 percent of its 2023 target of P874.2 billion.

Diokno remained optimistic that the Customs could improve its collections in the coming months.

‘The Customs conducts many confiscations… These have to be monetized. For example, the recent rice confiscations in Zamboanga, they can actually put it on bidding. Of course, we compute the value of that. But I am not concerned about their collection,” Diokno said.

Government expenditures in August reached P443.6 billion, P39.1 billion or 9.66 percent higher year-on-year. The end-August total disbursement amounted to P3.3 trillion, outpacing the P3.2 trillion spent in the same period a year ago by 3.54 percent or P113.4 billion. It also accounted for 63 percent of the P5.2 trillion programmed for the year.

Interest payments from January to August represented 11.72 percent of total expenditure, up from last year’s 10.62 percent.

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