By Bernadette D. Nicolas, February 17, 2020; Business Mirror

http://businessmirror.com.ph/2020/02/17/with-industries-hurting-virus-seen-to-hit-tax-take/

The Bureau of Internal Revenue (BIR) is expecting to lose billions in tax revenue as different industries are already hurting from the impact of the novel coronavirus disease-2019 (Covid-19).

BIR Officer in Charge-Assistant Commissioner Manuel V. Mapoy of the Large Taxpayers Service (LTS) told the BusinessMirror that they are looking at a “very gloomy” picture, especially in the tourism and the gaming industry.

Mapoy said several large taxpaying industry players, particularly hotels, malls, and even a distributor or manufacturer of alcoholic products, have informed them that they are experiencing weak customer demand amid the virus scare.

“The other night, I had a discussion with some of the executives of the hotel industry and they are saying that the occupancy [rate] is 30 percent to 35 percent only…. Now, they are looking at 30 percent to 35 percent occupancy rate from as high as 70 percent to 85 percent occupancy before the [coronavirus]. So definitely this will run into billions; and also the shopping malls, the shopping malls, wow, [their] traffic is talagang bagsak [truly in plunging mode],” Mapoy said in a phone interview with BusinessMirror.

According to Mapoy, a decline in tax collections from large taxpayers due to the virus scare could deliver a “tremendous” blow to the total BIR collections since 65 percent to 66 percent of the total BIR collections comes from the LTS.

Meanwhile, BIR Deputy Commissioner Arnel SD. Guballa told reporters LTS is targeting to collect P1.6 trillion out of the P2.576 trillion overall BIR collection target for the year.

One shopping mall that recently had a three-day sale informed the BIR that the result was negative, Mapoy said.

Mapoy said they expect that the impact on tax payments could go as far as hitting their collections of income taxes, value-added taxes, and even excise taxes.

“Even the distributor or manufacturer of beer and other alcoholic products informed us that we cannot expect [an] increase in payment, or maybe, [even see] reduced…payments because there are no orders from bars, night clubs and restaurants [since business is down],” he said.

Aside from Covid-19, the BIR is also seeing some revenue losses due to the impact of the Taal Volcano eruption, although Mapoy said this would be “minimal or negligible.”

Not much impact—Guballa

While Guballa said they are still in the process of collecting data on the impact of the Taal Volcano eruption and Covid-19 on the bureau’s revenue collection, he surmised that that there would not be that much of an impact from the virus scare but he said they are still thinking of alternative ways to raise the revenues.

“Magkakaroon siya ng effect by next month kasi ’yung for the month of February, ireremit sya ng March [The effect will be seen in March because collections from February will be remitted in March],” he said.

For his part, Mapoy said the BIR targets to compensate the losses by strict enforcement of their collection, including investigation of taxpayers in a bid to prevent revenue leakages.

Despite the foreseen impact of the revenue losses from the two unfortunate events, Mapoy still expressed optimism that the BIR could hit its revenue target for the year at P2.576 trillion.

“This is just the second month. I always believe in miracles. Maybe, who knows? Matatapos na naman itong coronavirus [This coronavirus is expected to be over in] in the coming days. Nobody can tell because this is just the beginning of the race. Huwag muna maging pessimistic kaagad [Let’s not be prematurely pessimistic],” he said.

The National Economic and Development Authority (Neda) earlier said the tourism sector could lose as much as P22.7 billion a month and shed as much as 95,000 jobs.

Nonetheless, Socioeconomic Planning Secretary Ernesto M. Pernia said last week the country’s economy still has a “fighting chance” to expand by around 6 percent in the first quarter.

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