THE Bureau of Internal Revenue (BIR) remains confident that it will meet its collection goal for major tax categories in 2025.
However, the new law lowering corporate income tax rates for certain foreign enterprises poses a negative risk to collections, it added.
This year’s collection goal is set at P3.232 trillion, up 13.36% compared to the P2.85 trillion in actual collections in 2024, according to Revenue Memorandum Order (RMO) No. 14-2025 released on March 20.
Some 52.95% or P1.71 trillion is expected to come from taxes on net income and profits. This was followed by value-added tax (VAT) of P710.04 billion, excise taxes (P343.10 billion), other taxes (P298.11 billion), and percentage taxes (P178.46 billion).
“Official stance is that targets are achievable, with reservations owing to the CREATE MORE (Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy) law which gave away a lot of taxes to encourage investments,” BIR Assistant Commissioner Jethro M. Sabariaga told BusinessWorld via Viber over the weekend.
Mr. Sabariaga had been asked whether the BIR expects to meet or surpass the targets for major tax categories.
President Ferdinand R. Marcos, Jr. in December signed the CREATE MORE Act to attract more investment.
“Lower income tax rates, accelerated/doubled deductions for certain costs, more value-added tax input allowed,” Mr. Sabriaga said in elaborating on the downward risks to the target.
The law further reduces the corporate income tax to 20% from 25% for registered business enterprises.
In the same RMO, the Bureau said it expects new tax measures to generate P21.98 billion including the VAT on digital service providers, windfall tax on mining, royalty on mining, the taxes on single-use plastics, passive income, financial intermediaries, and transactions.
The VAT on digital services, which imposes a 12% value-added tax on digital services on both resident and non-resident providers, is the only tax measure apart from CREATE MORE to have been signed. — Aubrey Rose A. Inosante