MANILA - Bureau of Internal Revenue collections for the first quarter of 2022 fell short of target as business utilize their input VAT credits on purchases under the Tax Reform for Acceleration and Inclusion (TRAIN) Law, the Finance Department said Monday.
Collections from operations for the first quarter reached P485.4 billion, 8.9 percent or P47.2 billion short of the target set by the Development Budget Coordination Committee (DBCC), the DOF said in a statement.
The amount collected from operations, however, is still higher by 32.4 billion or 7.2 percent from the P452.9 billion collection in the same period last year, the BIR said in a report to the Department of Finance.
Including collections from non-BIR operations of P18.1 billion for January to March, the total collection for the period reached P503.5 billion, Deputy Commissioner Arnel Guballa said.
The total collection is lower by P48.3 billion or 8.8 percent compared to the DBCC's total target for the period of P551.78, the DOF said.
Prior to Jan. 1, 2022, the Tax Code requires that input VAT from purchased capital goods with an aggregate acquisition cost of P1 million and above must be spread out to over 60 months beginning the month of purchase.
With the outright crediting input VAT by businesses, the BIR incurred a shortfall of P17.4 billion VAT collections and P9.4 billion in income tax collections for the first quarter of 2022 as compared to the DBCC targets, Guballa said.
This year's collection from VAT in the first quarter of P113.5 billion is P15.6 billion or 16 percent higher compared to last year's P97.9, Guballa said.
Businesses can avail of Section 35 of the TRAIN law or the provision allowing crediting of input value-added tax on capital goods.