Regional Allocation of the BIR Collection Goal for CY 1998

January 19, 1998 REVENUE MEMORANDUM ORDER NO. 01-98 SUBJECT : Regional Allocation of the BIR Collection Goal for CY 1998 TO : All Regional Directors and Other Officers Concerned I. CY 1998 Overall Collection Goal The revenue target of the Bureau for CY 1998 as of January 8, 1998 is P379,004 M broken down into: P355,845 M for existing measures, and P23,159 M for Comprehensive Tax Reform Program. (Table 1) II. Data Used Data used are based on the BIR Form 12.09 for January to November, 1997. 1. January-November, 1997 Actual Monthly Collection by Major Type of Tax 2. January-November, 1997 Regional Collections by Major Type of Tax CY 1997 Regional Collections reported by RAD were adjusted for proper crediting of collections on petroleum products. All collections on this product reported by some RDOs were credited to Revenue Region 8 Makati City since it was allocated the total goal for this source. III. Assumptions Used A. For Estimating CY 1997 Collection To determine the CY 1997 collection given the January to November 1997 collection in II, it is assumed that the ratio of the January to November 1996 to CY 1996 is equal to the ratio of January to November 1997 to CY 1997. B. For Allocating Certain Taxes 1. Excise Tax a. For Petroleum Products, the goal of P31,384 M is allocated solely to RR 8 Makati City where the head offices of the oil companies are located. b. For All Other Products, the regional goal allocation is based on where production is made. 2. Treasury Bills The goal on tax on interest from Treasury Bills of P14,358 M is given only to RR6 Manila, since it has jurisdiction over Bangko Sentral ng Pilipinas (BSP) which collects the tax for the BIR. 3. Stock Transaction Tax The goal on Stock Transaction Tax under the "Other Percentage Tax" group which includes the 2% on IPO per RA No. 7717 in the amount of P3,204 M is allocated to RR 7 Quezon City since the Philippine Stock Exchange is located in RDO No. 43 Pasig City. 4. Travel Tax The goal on Travel Tax in the amount of P409 M is given to RR 6 Manila since the Philippine Tourism Authority which collects the said tax for the BIR is located in Manila. IV. Methodology A. To determine the estimated CY 1997 Collection 1. Multiply the CY 1996 Collection and the ratio of January to November, 1997 to January to November, 1996. Example: Jan-Nov 1997 Coll. Est. CY 1997 Coll. = x CY 1996 Col. Jan-Nov 1996 Coll. P287,435,928,682.39 = x P256,493,183,512.62 P234,987,323,653.67 = P131,741,844,697.59 Annex A shows the estimated CY 1997 Collection and its breakdown by region. B. To determine the CY 1998 goal of each region 1. Compute the percentage growth rate of the CY 1998 goal over CY 1997 Estimated Collection. 2. Collection of each region was made to grow by the same percentage to get the total goal of each region. Examples: (1) To get the percentage growth, CY 1998 Goal-CY 1997 Est. Coll. = P379,004,000,000 P313,741,844,697 CY 1997 Est. Coll. P313,741,844,697 = 0.2080 (2) To get the total goal of RR 1, CY 1997 Est. Coll. x .2080 = P1,905,014,507 x .2080 = P2,301,281,000 Annex A shows the breakdown of the CY 1998 goal by region. C. To determine the CY 1998 regional goal for each major type of tax 1. Determine the percent distribution of the CY 1997 Estimated Regional Collection of each major type of tax. (Annex B) 2. Determine the goal of any region for any major type of tax by getting the product of the 1997 percent share of the region for the type of tax and the CY 1998 goal of that particular type of tax. Example: 1998 VAT Goal = Percent share on X CY 1998 VAT Goal of Region 1 1997 VAT Coll. (Table 1-B) of Region 1 (Annex B) = 0.008705324 x P56,813,000,000 = P494,576,000,000 Table 2 presents the CY 1998 regional goal by major type of taxes. D. To determine the monthly regional goal allocation for each type of tax 1. Compute the total goal for each month by major type of tax a. Estimate the collection for the month of December 1997 by ratio and proportion using the CY 1996 Collection. b. Determine the percent distribution of the 1997 monthly collection for each major type of tax. (Annex C) c. Apply the percent distribution of a particular major type of tax to its corresponding goal. Example: Jan 1998 VAT Goal = Percent share on X CY 1998 VAT Goal Jan 1997 VAT Coll. (Table 1-B) (Annex C) = 10.621 x P56,813,000,000 = P6,034,000,000 Annex D presents the CY 1998 total goal for each month by major type of tax. 2. Determine the monthly goal for each region by major type of tax using Table 2 and Annex D. Example: January 1997 VAT = January 1997 VAT Goal x CY 1997 VAT Goal Goal of Region 1 CY 1997 VAT Goal of Region 1 (from Annex D) (from Table 2) Tables 4-8 show the monthly regional goal distribution for each type of tax. V. List of Tables and Annexes Table 1 - BIR Over-All Collection Goal, CY 1998 Table 1-A - Comparative Over-All Collection Goals, CY 1997-CY 1998 Table 1-B - BIR Comparative Collection Goals by Five Major Type of Taxes, CY 1997-CY 1998 Table 2 - Regional Goal Allocation by Major Source, CY 1998 Table 3 - Total Monthly Tax Goal Allocation by Region, CY 1998 Table 4 - Monthly Income Tax Goal Allocation by Region, CY 1998 Table 5 - Monthly Excise Tax Goal Allocation by Region, CY 1998 Table 6 - Monthly Value-Added Tax Goal Allocation by Region, CY 1998 Table 7 - Monthly Other Percentage Tax Goal Allocation by Region, CY 1998 Table 8 - Monthly Other Taxes Goal Allocation by Region, CY 1998 Table 9 - Comparative Regional Collection Goals of CY 1997-CY 1998 Annex A - Total Goal by Region, CY 1998 Annex B - Percent Distribution of Collection by Region, by Major Type of Tax, CY 1997 Annex C - Percent Distribution of Total Monthly Collection by Major Type of Tax, CY 1997 Annex D - Total Monthly Goals by Major Type of Tax, CY 1998 VI. Requirement from Revenue Regions The Regional Directors are directed to submit to the Statistics Division on or before January 26, 1998 the Distribution of Regional Goals by RDO, by month and by type of taxes following Tables 3-8. After the First Semester, the Regional Directors are directed to review and evaluate their collection performance against their goals to determine the effect of the CTRP implementation. Submit all pertinent data to the Office of the Commissioner for possible adjustments in the regional goals for the Second Semester 1998. VII. Effectivity This Revenue Memorandum Order shall take effect immediately. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue Table 1 BIR Collection Goal by Type of Tax, CY 1998 Table 1-A Comparative Over-all Collection Goals Table 1-B BIR Comparative Collection Goals by Five Major Type of Taxes Table 2 Table 3 TOTAL MONTHLY TAX GOAL ALLOCATION BY REGION, CY 1998 (In Thousand Pesos) Table 4 MONTHLY INCOME TAX GOAL ALLOCATION BY REGION, CY 1998 (In Thousand Pesos) Table 5 MONTHLY EXCISE TAX GOAL ALLOCATION BY REGION, CY 1998 (In Thousand Pesos) Table 6 MONTHLY VALUE-ADDED TAX GOAL ALLOCATION BY REGION, CY 1997 (In Thousand Pesos) Table 7 MONTHLY OTHER PERCENTAGE TAX GOAL ALLOCATION BY REGION, CY 1998 (In Thousand Pesos) Table 8 MONTHLY OTHER TAXES GOAL ALLOCATION BY REGION, CY 1997 (In Thousand Pesos) Table 9 ANNEX A TOTAL GOAL BY REGION, CY 1998 ANNEX B PERCENT DISTRIBUTION OF COLLECTION BY REGION, BY MAJOR TYPE OF TAX, CY 1997 ANNEX C PERCENT DISTRIBUTION OF TOTAL MONTHLY COLLECTION BY MAJOR TYPE OF TAX, CY 1997 ANNEX D MONTHLY COLLECTION GOAL BY TYPE OF TAX, CY 1998 (In Thousand Pesos)