BIR, BOC still upbeat on reaching 2026 goals
The country’s two largest revenue agencies remain confident of meeting their revised 2026 collection targets, with the Bureau of Internal Revenue (BIR) banking on stronger economic growth and the Bureau of Customs (BOC) counting on improved import assessments to sustain collections.
The Development Budget Coordination Committee (DBCC) recently lowered the BIR’s collection target by P38 billion to P3.393 trillion, while raising the BOC’s goal by P7 billion to P1.011 trillion.
Despite the lower target, BIR Commissioner Charlie Mendoza said the revised goal remains “a tall order” as it is still higher than the agency’s P3.2-trillion target last year.
“We’re hoping for higher GDP (gross domestic product) growth in the coming months because it really has an impact on value-added tax, percentage tax and other business taxes,” Mendoza told reporters.
“Higher economic activity translates to more taxes. On our part, we have our digitalization initiatives and taxpayer education. The idea is to make compliance easier. If it’s easier for taxpayers to pay taxes, that translates to better revenue collection,” he added.
As it is, the Philippine economy grew by just 2.8 percent in the first quarter. The market is expecting growth to remain subdued in the second quarter amid the peak impact of the Middle East war.
Still, Mendoza said the BIR remains on track to meet its goal. He noted that June collections, while still unofficial, exceeded year-earlier levels, although growth likely slowed from May due to a high base from last year’s estate tax amnesty deadline.
From January to May, the BIR collected P1.434 trillion, exceeding its target by P9.7 billion and reaching about 42 percent of its revised full-year goal.
Meanwhile, Customs Commissioner Ariel Nepomuceno said the higher collection target likely reflects assumptions of a weaker peso, with the DBCC projecting the exchange rate to average P61 to P62 against the US dollar this year.
Since imports are priced in dollars, a weaker peso raises their peso value and, in turn, customs duties and taxes.
Nepomuceno, however, said the bureau was also relying on gradual improvements in its rate of assessment, or collections relative to the value of imports.
“There are a lot of imported items that I know if we increase the rate of assessment, we’ll be able to increase our revenues. But we have to do that incrementally,” he said.
As of mid-July, the BOC had already posted an P11.8-billion surplus against its target, more than enough to cover the P7-billion increase in its revised goal.
Latest data showed the BOC collected P491.7 billion from January to June, up 7.2 percent from a year earlier and equivalent to 48.6 percent of its revised full-year target.
