Allocation of CY 2014 BIR Collection Goal by Implementing Office

January 10, 2014 REVENUE MEMORANDUM ORDER NO. 004-14 TO : All Revenue Officials and Employees Concerned SUBJECT : Allocation of CY 2014 BIR Collection Goal by Implementing Office I. Background The overall CY 2014 collection goal of the Bureau of Internal Revenue has been set by the Department of Finance (DOF) at P1,456.330 Billion. The goal is based on the CY 2014 Medium Term Revenue Program (MTRP), as of December 18, 2013. This is higher than the CY 2013 goal of P1,253.679 Billion by P202.651 Billion or 16.16%. II. Objective This Order is being issued to establish the following: 1. The policies, methodology and guidelines applied in the CY 2014 Collection Goal Allocation; and 2. The distribution of the collection goal by Implementing Offices: Revenue District Offices and Large Taxpayer Units. III. General Policies and Guidelines Hereunder are the policies and guidelines that shall be observed relative to the data requirements and goal allocation methodology to be used in computing the goal for the implementing offices. aTICAc A. Data Used 1. The CY 2013 estimated collection, which is the sum of: a. The total actual collections for the period January-November, 2013, based on data from the Consolidated Monthly Statistical Report of Revenue Collections (BIR Form No. 1209) as updated by the concerned implementing offices with the Research and Statistics Division (RSD) as of December 26, 2013; and b. The estimated October, November and December collections based on the October, November and December, 2013 goals for those implementing offices that have not submitted their respective BIR Form No. 1209 reports as of December 26, 2013. 2. Data considered as refinements for CY 2013 Collections: a. Special Taxes composed of taxes on Government Securities and Excise Taxes for CY 2013, per BIR Form No. 1209 reports updated as of December 26, 2013; b. CY 2013 Collections from Non-Recurring Transactions, as of November 2013, where each single transaction accounts for at least ten percent (10%) of a particular Region's total collections for a specific month, based on figures provided in the BIR Form No. 1209 reports updated as of December 26, 2013. Only fifty percent (50%) of the actual amount was considered as a refinement. The amount of non-recurring collections considered was distributed by month for the calendar year in the concerned implementing office; HIDCTA c. CY 2013 regular Corporate Income Tax Collections from MALAMPAYA, per the Excise LT Audit Division I report, as of December 16, 2013; d. CY 2013 estimated BSP remittance of Final Withholding Tax (FWT) on interest due from domestic borrowings under Reverse Repurchase Agreements (RRPs), as well as other similar transactions, per BIR Form No. 1209 reports submitted by the Large Taxpayers Service (LTS) as of December 26, 2013; and e. Estimated June-December, 2013 collections from the Philippine Deposit Insurance Corporation (PDIC) based on BIR Form No. 1209 reports as of December 26, 2013. 3. Other Data Considered: a. Economic assumptions/indicators provided in the MTRP as of December 18, 2013 (Table 1); b. Collection Goals, by major tax type, culled from the abovementioned MTRP; c. The CY 2014 program on the volume of government securities and their corresponding taxes (FWT and Documentary Stamp Tax [DST]) were allocated monthly as provided by the Bureau of the Treasury (BTr) dated December 26, 2013; cADaIH d. The CY 2014 goal on Final Withholding Tax Remittance of BSP as estimated by the RSD on December 26, 2013, based on data provided by the LTS covering BSP remittances for the months of January-November, 2013; e. January-May, 2013 collections from the newly enlisted taxpayers to LTS (effective June 1, 2013) based on Integrated Tax Systems-CBR generated report dated December 10, 2013; and f. January-December, 2013 collections for the 105 newly enlisted taxpayers in the LTS effective January 1, 2014 by tax type, by month and by implementing office, based on the listing provided by the LTS and collection data extracted by the RSD from the ITS-CBR dated December 23, 2013 and January 7, 2014. B. Goal Allocation Methodology 1. Goal Allocation by Implementing Offices/Units and Revenue Districts a. The preliminary total goal for BIR Operations was allocated to all major implementing offices ( i.e. , total regional and LTS level), taking into account the RDO/LTS Unit CY 2013 estimated percent share to total collections net of special taxes, non-recurring collections, and collections from delisted taxpayers effective CY 2013 (92 taxpayers) and CY 2014 (105 taxpayers). The CY 2014 total goal, by implementing office, is provided in Table 2. AEIHaS b. All new taxpayers enlisted to the Large Taxpayers Service were subjected to the same simulation carried out for all implementing offices (unless otherwise directed by the Commissioner of Internal Revenue). c. The actual/estimated refined collection (net of special taxes, non-recurring collections, and delisted taxpayers) for CY 2013 resulted to a preliminary growth rate ranging from 19.48% to 21.17%. However, the effective growth rates that included special taxes, non-recurring collections, and delisted taxpayers resulted to a range from 14.58% to 23.10%. The CY 2013 refined collections from the new large taxpayers (105 taxpayers) is estimated to grow by 20.30%. d. The following taxes have been directly allocated to the LTS: Goal on Excise taxes amounting to P123.931 Billion of which the monthly allocation was provided by LTS, dated January 7, 2014; The MALAMPAYA Income Tax goal of P9.185 billion; and cCaSHA Estimated goal on Final Withholding Taxes of the BSP (BSP-FWT) in the amount of P13.234 billion. e. Fifty percent (50%) of the non-recurring collections was added back to the office/district concerned and distributed over twelve (12) months. 2. Goal Allocation by Major Tax Type and Month The total goal allocation, by major tax type, was distributed proportionately among the implementing offices based on their share to total estimated CY 2013 collections on BIR operations. These goal allocations are provided in Table 3. The total monthly goal allocation, by major tax type, of the implementing offices was based on the monthly trends of estimated CY 2013 collections. See Table 4A-4F. C. Attachments The following tables are attached for the reference of all concerned revenue officials and personnel: Table 1 Macroeconomic Assumptions and Collection Goal by Major Tax Type, CY 2014 Table 2 Collection Goal Allocation by Implementing Office, CY 2014 Table 3 Total Collection Goal Allocation by Implementing Office and Major Tax Type, CY 2014 Table 4A Monthly Collection Goal for Income Taxes by Implementing Office, CY 2014 Table 4B Monthly Collection Goal Allocation for Excise Taxes by Implementing Office, CY 2014 Table 4C Monthly Collection Goal Allocation for Value-Added Tax by Implementing Office, CY 2014 Table 4D Monthly Collection Goal Allocation for Percentage Taxes by Implementing Office, CY 2014 Table 4E Monthly Collection Goal Allocation for Other Taxes by Implementing Office, CY 2014 Table 4F Monthly Total Collection Goal Allocation by Implementing Office, CY 2014 Table 5 Monthly Collection Goal by Major Tax Type, CY 2014 D. Other Requirements 1. The LTS shall allocate its goal among its implementing units, and prepare the corresponding memorandum within five (5) working days upon the issuance of this Order. EHSITc 2. The Deputy Commissioner for Operations and the Assistant Commissioner of LTS shall prepare and submit the appropriate revenue issuance to establish the policies, guidelines and methodology for the individual goal allocation of the respective implementing units under their jurisdiction, for the approval of the Commissioner. IV. Effectivity This Order takes effect immediately. (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue TABLE 1 Macroeconomic Indicators & Assumptions and Collection Goal by Major Tax Type, CY 2014 (In Thousand Pesos) Macroeconomic Indicators CY 2014 GDP, Nominal 13,026,953,000 GDP Real 7,179,021,000 GDP Growth, Real 6.80% GNI, Nominal 15,512,250,000 GNI Growth, Nominal 12.12% GNI Growth, Real 6.70% Inflation Rate 3.00% T-Bill Rate (364-day) 2.00% Price of Oil (US$/Barrel) 90.00 Imports, FOB, US$ Thousands 65,900,000 Exports, FOB, US$ Thousands 51,000,000 Tax Effort 11.18% BIR Collection Goal Total 1,456,330,000 I. Taxes on Net Income and Profits 855,773,000 II. Excise Taxes 124,171,000 III. Value-Added Tax 325,738,000 IV. Percentage Taxes 72,408,000 V. Other Taxes 78,240,000 Source : Medium Term Revenue Program (MTRP) rundate December 18, 2013 TABLE 2 Collection Goal Allocation by Implementing Office, CY 2014 (In Thousand Pesos) Office Preliminary Recurring Securities Securities Total Goal Goal Grand Total 1,276,420,090 124,171,000 9,185,000 13,233,814 2,287,096 1,425,297,000 A. Large Taxpayers 768,732,922 123,930,840 9,185,000 13,233,814 - - 915,082,576 Service B. Revenue Regions 507,687,168 240,160 - - 2,287,096 - - 510,214,424 1 CALASIAO, 9,957,871 5,292 - - - - - 9,963,163 PANGASINAN 2 CORDILLERA 4,695,166 3,974 - - - - - 4,699,140 ADM. REGION 3 TUGUEGARAO, 6,833,800 22,573 - - - - - 6,856,373 CAGAYAN 4 SAN FERNANDO, 20,816,864 27,392 - - 1,014,093 - - 21,858,349 PAMPANGA 5 CALOOCAN 19,670,941 10,457 - - - - - 19,681,398 6 MANILA 39,963,435 2,370 - - 1,273,003 - - 41,238,808 7 QUEZON CITY 121,454,757 3,978 - - - - - 121,458,735 8 MAKATI CITY 148,725,490 21,881 - - - - 148,747,371 9 SAN PABLO 42,221,987 2,580 - - - - - 42,224,567 CITY 10 LEGASPI CITY 7,778,743 9,540 - - - - - 7,788,283 11 ILOILO CITY 8,927,977 4,475 - - - - - 8,932,452 12 BACOLOD CITY 8,619,526 5,192 - - - - - 8,624,718 13 CEBU CITY 20,939,691 4,146 - - - - - 20,943,837 14 TACLOBAN CITY 6,599,361 10,512 - - - - - 6,609,873 15 ZAMBOANGA 5,463,185 34,382 - - - - - 5,497,567 CITY 16 CAGAYAN DE 10,588,262 1,659 - - - - - 10,589,921 ORO CITY 17 BUTUAN CITY 4,060,167 63,393 - - - - - 4,123,560 18 KORONADAL 7,235,465 540 - - - - - 7,236,005 CITY 19 DAVAO CITY 13,134,480 5,824 - - - - - 13,140,304 TABLE 3 Total Collection Goal Allocation by Implementing Office and Major Tax Type, CY 2014 (In Thousand Pesos) Implementing Total Income Excise Value-Added Percentage Other Office Taxes Taxes Tax Taxes Taxes Grand Total 1,425,297,000 829,759,000 124,171,000 325,738,000 72,408,000 73,221,000 A. Large Taxpayers 915,082,576 500,659,626 123,930,840 196,574,355 48,962,208 44,955,547 Service B. Revenue Regions/ 510,214,424 329,099,374 240,160 129,163,645 23,445,792 28,265,453 Districts 1 CALASIAO, 9,963,163 6,259,361 5,292 2,764,832 409,113 524,565 PANGASINAN 2 CORDILLERA 4,699,140 3,082,534 3,974 1,161,136 274,208 177,288 ADMIN. REGION 3 TUGUEGARAO, 6,856,373 4,616,137 22,573 1,487,876 371,523 358,264 CAGAYAN 4 SAN FERNANDO, 21,858,349 14,610,055 27,392 5,246,324 772,133 1,202,445 PAMPANGA 5 CALOOCAN 19,681,398 11,164,467 10,457 6,427,221 843,289 1,235,964 6 MANILA 41,238,808 25,267,312 2,370 11,521,282 2,144,404 2,303,440 7 QUEZON CITY 121,458,735 78,199,114 3,978 31,425,502 5,396,022 6,434,119 8 MAKATI 148,747,371 97,435,534 21,881 36,355,948 7,430,347 7,503,661 9 SAN PABLO 42,224,567 28,874,482 2,580 8,066,234 1,790,808 3,490,463 CITY 10 LEGASPI CITY 7,788,283 4,943,596 9,540 2,165,891 361,678 307,578 11 ILOILO CITY 8,932,452 5,622,777 4,475 2,492,636 336,140 476,424 12 BACOLOD CITY 8,624,718 5,335,699 5,192 2,486,379 378,475 418,973 13 CEBU CITY 20,943,837 13,711,677 4,146 4,963,640 939,422 1,324,952 14 TACLOBAN 6,609,873 4,219,454 10,512 1,814,065 238,528 327,314 CITY 15 ZAMBOANGA 5,497,567 3,563,021 34,382 1,569,852 167,945 162,367 CITY 16 CAGAYAN DE 10,589,921 6,702,537 1,659 2,674,801 425,751 785,173 ORO CITY 17 BUTUAN CITY 4,123,560 2,445,173 63,393 1,131,935 210,874 272,185 18 KORONADAL 7,236,005 4,943,881 540 1,732,490 322,452 236,642 CITY 19 DAVAO CITY 13,140,304 8,102,563 5,824 3,675,601 632,680 723,636 TABLE 4A Monthly Collection Goal Allocation for Income Taxes by Implementing Office, CY 2014 TABLE 4B Monthly Collection Goal Allocation for Excise Taxes by Implementing Office, CY 2014 TABLE 4C Monthly Collection Goal Allocation for Value-Added Tax by Implementing Office, CY 2014 TABLE 4D Monthly Collection Goal Allocation for Percentage Taxes by Implementing Office, CY 2014 TABLE 4E Monthly Collection Goal Allocation for Other Taxes by Implementing Office, CY 2014 TABLE 4F Monthly Total Collection Goal by Implementing Office, CY 2014 TABLE 5 Monthly Collection Goal by Major Tax Type, CY 2014 <ftp://ftp.bir.gov.ph/webadmin1/pdf/81226RMO%204-2014.pdf> last visited February 13, 2014.