Wednesday, July 09, 2008 P95M reduction on tax collection eyed By Victor L. Camion
THE Bureau of Internal Revenue (BIR) in Dumaguete City has projected a reduction of P95 million from its yearly withholding tax collection on wages this year.
Lawyer Arturo Acabal, officer-in-charge of the district revenue office, said Dumaguete revenue district will not meet this year's target collection with the implementation of the Republic Act (RA) 9504 or the measure exempting minimum wage earners from paying income taxes.
The Department of Finance (DOF) and Development Budget Coordination Council (DBCC) set the amount of P1.1 billion target collection for the 31 cities and municipalities of Negros Oriental and Siquijor under the Dumaguete revenue district office.
Acabal said his office was able to collect P315 million from the withholding tax on wages.
He, however, said that 35 percent of P315 million would not be collected this year in effect of the implementation of RA 9504.
Acabal said the exemption of personal withholding tax last year is raging P20,000 for single and P25,000 to P35,000 for married couple. However, it increased to P50,000 this year.
The P8,000 exemption for not more than four dependents now reached P25,000 annually.
Exemption of minimum wage earners, on the other hand, increased from P5,000 to P10,000 per annum.
The implementation of the new law starts on July this year, he said, adding that the reduction of withholding tax collection on wages will be doubled next year.
Due to the projected reduction of tax collection this year, the local revenue office in Dumaguete City worked double time to meet the target collection of P1.1 billion.
Acabal told Sun.Star that there are alternatives being considered to cover for the foregone revenue starting next year. One of those is the revision of the zonal valuation of real properties, he said.
Acabal expects to collect between P8 to P10 million for this matter.
The DOF and DBCC have already set 30 percent increase compared to last year's total revenue collections.
Acabal said the Dumaguete revenue district office has collected almost P900 million in 2007.
He admitted that its collection was short by nine percent against the target last year.
He added that the DOF and DBCC have also set the amount of almost P1 billion in 2007 revenue collection or 30 percent increase against its total collection on 2006, and the Dumaguete BIR district collected over 26 percent of the target revenue collection in 2006.
The local revenue district, however, was not penalized because the shortfall of collection last year was justifiable, Acbal said.
