Revised Regional Allocation of the BIR Collection Goal for CY 1999

November 17, 1999 REVENUE MEMORANDUM ORDER NO. 90-99 SUBJECT : Revised Regional Allocation of the BIR Collection Goal for CY 1999 TO : All Regional Directors and Other Officers Concerned I. CY 1999 Overall Collection Goal The revised revenue target of the Bureau for CY 1999 is P353,631 M broken down into: P341,749 M for existing measures, P10,882 M for Comprehensive Tax Reform Program and P1,000 M for Other Measures which for this year covers the Redefinition of Automobiles. (Table 1) II. Data Used Collection data on Income Taxes (except the tax on T-bills which are directly sourced from the Bureau of Treasury), VAT, Other Percentage Taxes and Other Taxes were gathered from BIR Form 12.09 furnished by the Revenue Accounting Division. Collection data on Excise Taxes were gathered from the Regulatory Operations Monitoring Division. III. Allocation of Certain Taxes 1. Excise Tax The regional goal allocation for Excise Taxes is based on the place of production. 2. Direct Crediting The goal on tax on collections from Direct Crediting of P26,937 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" type in the amount of P2,583 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 P170 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. Revised CY 1999 Regional Goals Following the methodology in Annex A, the regional goals are presented in Tables 2 - 8. V. List of Tables and Annexes Table 1 Revised BIR Over-All Collection Goal, CY 1999 Table 2 Revised Regional Goal Allocation by Major Source, CY 1999 Table 3 Revised Total Monthly Tax Goal Allocation by Region, CY 1999 Table 4 Revised Monthly Income Tax Goal Allocation by Region, CY 1999 Table 5 Revised Monthly Excise Tax Goal Allocation by Region, CY 1999 Table 6 Revised Monthly Value-Added Tax Goal Allocation by Region, CY 1999 Table 7 Revised Monthly Other Percentage Tax Goal Allocation by Region, CY 1999 Table 8 Revised Monthly Other Taxes Goal Allocation by Region, CY 1999 Annex A Methodology Used in Goal Allocation Annex B CY 1998 Collection by Region Annex C Revised Total Goal by Region, CY 1999 VI. Requirement from Revenue Regions The Regional Directors are hereby required to submit to the Statistics Division on or before December 15,1999 the Distribution of Regional Goals by RDO, by month and by type of taxes following Tables 3 - 8. VII. Effectivity This Revenue Memorandum Order shall take effect immediately. (SGD.) BEETHOVEN L. RUALO Commissioner Bureau of Internal Revenue TABLE 1 BIR COLLECTION GOAL BY TYPE OF TAX, CY ] 999 (In Million Pesos) TAX CLASSIFICATION GOAL 1999 GRAND TOTAL P 353,631 I. EXISTING SYSTEM P 341,749 A. Net Income & Profits 213,227 B. Excise Taxes 40,326 C. Value Added Taxes 53,499 D. Other Percentage Taxes 17,322 E. Other Domestic Taxes 17,375 II. COMPREHENSIVE TAX REFORM PACKAGE P 10,882 A. INCOME TAXES P (8,915) a. Rationalization of the basic personal exemption for taxpayers regardless of tax status and restructuring of tax rate schedule (11,632) b. Exclusion of GSIS and SSS contributions form income tax base (4,408) c. Use of a flat rate of 30% on modified gross income of business earners 0 d. Re-imposition of the tax on dividend income (6% in 1998) 1,615 e. Restructuring of the corporate income tax and reduction of the corporate tax rate (3,010) f. Imposition of the regular corporate income tax on domestic and foreign mutual life insurance companies 0 g. Adoption of a minimum corporate income tax 620 h. Adoption of a Fringe Benefit Tax 3,057 i. Taxation of non-residents on Phil. Income (87) j. Increase in capital gains tax on real property from 5% to 6% (for individuals) 617 k. Controls on deduction 1,008 l. Reduction of capital gains tax from unlisted shares of stocks (387) m. 7.5% tax on FCDU deposits 677 n. Deduction of P2,400 health insurance premiums (604) o. NOLCO (552) p. Income tax on GOCCs 1,635 q. Tax on REPOs (T-Bills ) 1,141 r. Disallowance of tax arbitrage 1,395 B. EXCISE TAX P19,842 a. Shift to a 3-tiered specific tax rate for cigarettes plus indexation 1,295 b. Shift to a 2-tiered specific tax rate on fermented liquor plus indexation 1,957 c. Increase in specific tax rates of distilled spirits and wines by an average of 25% 540 d. Restructuring of the excise tax on petroleum products through consolidation of the levy and part of the duty into specific tax (RA 8184) 16,050 C. OTHER DOMESTIC TAXES P(45) a. Reduction of estate tax (6) b. Reduction in donor's tax (39) III. 1999 MEASURES P 1,000 A. REDEFINITION OF AUTOMOBILES P 1,000 ASSUMPTIONS USED: 1. GDP Nominal P 2,938,821 GDP Growth, Nominal 10.23 GDP Real P 915,390 GDP Growth, Real 3.00 GNP Nominal P 3,093,416 GNP Growth, Nominal 10.71 GNP Real P 964,375 GNP Growth, Real 3.50 2. Inflation Rate 7.00 3. Exchange Rate (P/US$1) P 40.0000 4. Depreciation Rate -2.18 5. T-Bill Rate (91-day) 10.50 6. T-Bill Rate (Weighted Average) 11.60 Table 2 - Revised BIR Regional Collection Goal by Major Source, CY 1999 Table 3 - Revised Total Monthly Tax Goal Allocation by Region, CY 1999 Table 4 - Revised Monthly Income Tax Goal Allocation by Region, CY 1999 Table 6 - Revised Monthly Value-Added Tax Goal Allocation by Region, CY 1999 Table 7 - Revised Monthly Other Percentage Tax Goal Allocation by Region, CY 1999 Table 8 - Revised Monthly Other Taxes Goal Allocation by Region, CY 1999 ANNEX A Methodology A. Goal Allocation by Implementing Group To compute-for the collection goals of each implementing group, the percent share of each group to the CY 1999 collection was applied to the CY 2000 goal for each major type of tax. B. Refinement of Regional Collection by Major Source To refine the regional collection reported in BIR 12.09, the following were deducted: 1. Collection of taxpayers which have transferred to another region. 2. Collection from Large Taxpayers. 3. Collection from Excise Taxpayers. C. To compute for the regional goals for each major type of taxes 1. Using Annex B4, allocate the regional goal for each major type, applying the ratio and proportion technique to CY 1998 collection. 2. Add the goals for the special taxes to the respective RRs collecting from these sources. 3. Add up the goals for the five major types for each region. Table 3 shows the CY 1999 goal for each major type of tax. D. To compute for the monthly allocation of goals 1. Compute the total goal for each month by major type of tax Determine the monthly goal for each major type of tax by applying ratio and proportion technique to the average of CY 1998 and 1997 actual monthly collection less non-recurring collections. Table 4 presents the CY 1999 total goal for each month by major type of tax. 2. Determine the monthly goal for each region by major type of tax using Tables 2 and 3. Example: January 1999 VAT = January 1999 VAT Goal x CY 1999 VAT Goal Goal of Region 1 CY 1999 VAT Goal Of Region 1 (from Table 3) (from Table 2) For Revenue Regions 06, and 07, this procedure is also followed wherein the taxes in IV are added after this process. Tables 5A - 10 show the monthly regional goal distribution for each type of tax . ANNEX B CY 1998 Collection by Region by Major Type Tax ANNEX C Revised Total Goal by Region, CY 1999