BIR’s Lumagui sees digital VAT revenue at P10B by year’s end

THE Bureau of Internal Revenue (BIR) expects to collect P10 billion in value-added tax (VAT) from digital services, according to Commissioner Romeo D. Lumagui, Jr.

In chance remarks to reporters, Mr. Lumagui said the agency is expected to ramp up collections after having generated nearly P3 billion in the first six months.

“For the full year, I think we’ll reach P10 billion. That was the original projection when the law was enacted. If it falls short, it will be close to P10 billion,” Mr. Lumagui said on the sidelines of a case filing.

The government imposed a 12% VAT on digital services consumed in the Philippines on June 1. President Ferdinand R. Marcos, Jr. signed the digital services VAT law in October.

Meanwhile, Mr. Lumagui also said lower remittances from the Department of Public Works and Highways hurt the BIR’s overall collection after a solid first half.

“This is primarily because the DPWH ordered a halt to payments to contractors and suspended the projects to verify whether they were actually completed. Even the withholding taxes that DPWH remits to the BIR represent a significant amount,” he said.

At the end of October, overall BIR collections grew 10.88% to P2.323 trillion. Its revised target for the year is P2.85 trillion.

Mr. Lumagui said the target will be subject to variability because official projections assume 6% gross domestic product (GDP) growth.

“’Yan ang nire-request natin, na mag-adjust based on GDP. Especially with what happened, nag-slow down talaga. ’Yung bawas nga ng DPWH affected our collections (We have requested a target adjustment because of the likely GDP shortfall. Growth really slowed, with reductions in DPWH spending affecting our collections),” he said.

Finance Secretary Ralph G. Recto has said that the BIR and the Bureau of Customs are expected to miss their targets in light of the slowdown in growth and global trade. — Aubrey Rose A. Insane