On January-July 2014 Fiscal Performance

Statement of Finance Secretary Cesar Purisima

on January-July 2014 Fiscal Performance

“I am pleased to report that the National Government posted a deficit of P1.8 billion in July 2014, narrower than year-ago levels as a result of efficient collection of tax revenues. The year-to-date deficit was recorded at P55.7 billion, well-within the program.

“Netting out interest payments brought the primary balance in July to a surplus of P46.5 billion. For January to July, the primary surplus was at P152.2 billion, wider than last year’s P106.1 billion.

“In the first semester of the year, we have recorded a tax effort of 13.7% and a revenue effort of 15.6%, higher than last year’s comparable figures of 13.6% and 15.3%, respectively. For the first six months of 2014 revenues expanded at 11.2% year-on-year, higher than the 9.2% growth in nominal GDP in the same period. We have maintained this trend of faster revenue growth than nominal GDP growth since 2011.

“This encouraging news of higher growth in revenues and in GDP comes after the latest domestic liability management transaction of the Bureau of Treasury and the signing of a grant agreement with the European Union for health sector reform.

“These recent developments are testament that our thrust of good governance continues to be fundamental to creating a virtuous cycle of growth and investment in social services and improving the lives of Filipinos. However, our work here is not done. I see the remaining years of this administration as the pivotal moment to institutionalize reform and to augment productive investments. We will use this time to push for legislative reforms, raise revenues, and manage our debt to effectively support the government’s key priorities.

Total revenues grow double-digits; BIR and BTr exceed targets

“Revenues amounted to P166.7 billion in July, growing by 15.3% from the comparable period in 2013. In the period of January to July, the National Government collected P1.10 trillion, up 11.8% from last year.

“The Bureau of Internal Revenue (BIR) exceeded its target for the month,raking in P119.9 billion or a growth of 19.8%. Year-to-date, BIR collections grew by a tenth to P763.2 billion.

“The Bureau of Customs (BOC) recorded double-digit growth for the seventh month in a row. The Bureau collected P30.5 billion in July, higher than last July’s figures by 10.1%. For the first seven months, Customs’ take reached P203.9 billion, up 18.0% year-on-year.

“Lastly, the Bureau of Treasury (BTr) income for July amounted to P7.5 billion, exceeding its target by 22.0%. This brought the date tally toP70.4 billion, marking a 22.6% increase from same period last year.

Share of interest payments to expenditures see downward trend


“National Government disbursements for July were P168.5 billion. For January to July, disbursements were recorded at P1.16 trillion, higher 6.2% over comparable figures in 2013.

“Nominal interest payments for the month decreased to P48.2 billion, or to P208.0 billion for January to July. As a percentage of expenditures, interest payments continue to decrease – in the first seven months of 2014, it has dipped to 18.0% from 19.4% in the same period a year ago.

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NG Fiscal Deficit for July 2014 Narrows to P1.8 billion Year-to-Date Fiscal Deficit at P55.7 billion

NG Fiscal Deficit for July 2014 Narrows to P1.8 billion

Year-to-Date Fiscal Deficit at P55.7 billion

 

29 August 2014 Manila, Philippines –   The National Government (NG) recorded a P1.8 billion fiscal deficit in July as revenue generating agencies ramped up collection efforts. The July deficit is down 97% from the same period last year, resulting to a lower cumulative budget shortfall of P55.7 billion for the first seven months of 2014 compared to P104.5 billion in 2013.

Revenue Performance

 

Total revenues for the month amounted to P166.7 billion, registering a growth of15% compared to the same month last year. This brings year-to-date collections to P1.10 trillion, reflecting a 12% increment over comparable figures in 2013.

The Bureau of Internal Revenue(BIR) collectedP119.9 billion in July, posting a double-digit year-on-year increase of 20%, registering the highest growth in monthly collections attained for the year. In total, BIR collections has grown 10% year-on-year to P763.2 billion for the first seven months of 2014.

The Bureau of Customs(BOC) managed a 10% growth for the month of July with actual collections of P30.5 billion. BOC has raised P203.9 billion for the year registering an 18% year-on-year improvement in performance.

Bureau of the Treasury (BTr) income amounted to P7.5 billion in July, down 6% from the previous year due to lower interest earned from NG investments and depositsNevertheless, Total BTr income of P70.4 billion from January to July still increased by 23% year-on-year, mostly due to the increase in dividend collections and interest income.

Collections from other offices contributed P8.8 billion, which is 1% lower than collections last year. However, year-to-date revenue of P63.0 billion still indicates a 5% improvement in collections over the same period last year.

 

Expenditures

NG disbursements amounted to P168.5 billion in July, 15% or P29.4 billion lower than comparable figures last yearYear-to-date expenditures stands at P1.16 trillion, 6% higher than similar spending for 2013.

Interest payments (IP) for July declined by 10% year-on-year to P48.2 billion from P53.5 billion in 2013 as both domestic and foreign IP payments has gone down. Similarly, total IP of P208 billion for January to July is 1% behind the pace set last year.

Primary Surplus/ (Deficit)

Netting out interest payments from expenditures, NG recorded a P46.5 billion primary surplus for the month of July resulting to a cumulative primary surplus of P152.2 billion, P46.1 billion higher than its level over the same period in 2013.

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Two delinquent lady taxpayers from Quezon City charged with willful failure to pay tax

Two delinquent lady taxpayers from Quezon City charged with willful failure to pay tax

 

The Bureau of Internal Revenue (BIR) today filed separate criminal complaints with the Department of Justice against two (2) delinquent individual taxpayersfor Willful Failure to Pay Taxes under the National Internal Revenue Code of 1997, as amended (Tax Code).

Charged for violating Section 255 of the Tax Code was EVANGELINE M. SERTESA (SERTESA), sole proprietress of E.M.S. ENTERPRISES. SERTESA is a contractor and merchandising broker with registered address at F. Salvador, Jordan Plains Subdivision, Sta. Monica, Novaliches, Quezon City.

SERTESA was sued for deficiency tax liabilities for taxable year 2007 in the aggregate amount of P52.77 million, inclusive of increments, consisting of P31.03 million in Income Tax (IT), and P21.74 million in Value Added Tax (VAT).

Likewise charged for the same violation was SOCORRO H. VIAR (VIAR), sole proprietress of CORING’s GROCERY. She is engaged in the retail of grocery items with registered address at No. 20 E. Jacinto St., Sta. Elena, Marikina City.

VIAR was assessed deficiency tax liabilities for taxable year 2007 in the sum of P11.16 million, inclusive of increments, broken down as follows: IT - P6.29 million; and VAT - P4.87 million.

BIR Quezon City records of investigation showed that the abovementioned respondents were served the corresponding Letter Notices (LN) showing 100% discrepancy on sales / purchases per Summary List of Sales and Purchases submitted by customers as against declarations per tax returns, Letters of Authority (LOA), Notices of Informal Conference (NIC), Preliminary Assessment Notices (PAN), Final Assessment Notices (FAN) and Formal Letters of Demand (FLD) with Details of Discrepancies but failed to protest said assessments, hence making the same final, executory, and demandable.

The subsequent issuance of Preliminary Collection Letters, Final Notices Before Seizure, Warrants of Distraint and/or Levy, Warrants of Garnishment, and Demands Before Suit were ignored by the respondents, as the said tax assessments remained unpaid. The respondents’ obstinate failure and continued refusal to pay their long overdue deficiency tax assessments, despite repeated demands, constitute willful failure to pay the taxes due to the government.

The cases against EVANGELINE M. SERTESA, and SOCORRO H. VIAR are the 279th and 280th, respectively, filed under the RATE program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares. These are likewise RATE cases of Revenue Region No. 7, Quezon City.

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Dentist from Caloocan City charged with tax evasion for grossly underdeclaring service income received thru credit card payments

Dentist from Caloocan City charged with tax evasion for grossly underdeclaring service income received thru credit card payments

The Bureau of Internal Revenue (BIR) today filed a criminal complaint with the Department of Justice against DR. ALEXANDER EDUARDO REYES GARCIA (Dr. GARCIA) for Willful Attempt to Evade or Defeat Tax, and Deliberate Failure to Supply Correct and Accurate Information in his Income Tax Return (ITR) for taxable years 2011, 2012 and 2013 in violation of Sections 254 and 255 of the National Internal Revenue Code of 1997, as amended (Tax Code).

DR. GARCIA was likewise charged with Deliberate Failure to file his Value Added Tax (VAT) Returns and Failure to Register as VAT Taxpayer for taxable years 2011, 2012 and 2013 in violation of Section 275, in relation to Section 236(G)(1) of the  Tax Code.

DR. GARCIA is a dentist operating under the business name SACRED HEART DENTAL CENTER with business address at 129 Asuncion Street, Morning Breeze Subdivision, Brgy. 84 Zone 8, Caloocan City.

The case against DR. GARCIA stemmed from information extracted from the Information Systems database indicating that income payments made to the dentist for the years 2011, 2012 and 2013 amounted to P42.45 million. On the other hand, total income declared by DR. GARCIA in his ITRs for the said three-year period amounted to P2.98 million, broken down into: P0.891 million in 2011; P0.999 million in 2012; and P1.09 million in 2013.

Verification of the said third-party information by investigators through access letters sent to credit card companies whose services were utilized by the clients of DR. GARCIA to pay him revealed that he received from BDO Unibank, Inc. P3.30 million in 2011, P3.13 million in 2012 and P1.84 million in 2013. He also got from Citibank, N.A. P10.89 million in 2011, P7.52 million in 2012 and P15.77 million in 2013. In sum, DR. GARCIA earned P14.19 million in 2011, P10.65 million in 2012 and P17.61 million in 2013.

A comparison and evaluation of DR. GARCIA’s declared service income as against the income he actually received from the said credit card companies showed that he substantially underdeclared his correct taxable income/receipts by 1,492% or P13.30 million in 2011, 966% or P9.65 million in 2012 and 1,516% or P16.52 million in 2013.

Under Sec. 248 (B) of the Tax Code, under-declaration of taxable income by more than 30% constitutes a prima facie case of fraud.

He likewise failed to register as VAT Taxpayer considering that the amount of his service fees starting in 2011 exceeded the threshold amount of P1.92 million and thus, failed to file the required VAT returns and pay the corresponding VAT due thereon.

As a consequence of his acts and omissions, DR. GARCIA was assessed a total tax liability amounting to P31.64 million, inclusive of surcharges and interests, broken down into: 2011 - P11.91 million (Income Tax - P8.35 million and VAT – P3.56 million); 2012 - P7.88 million (Income Tax - P5.46 million and VAT – P2.42 million); and 2013 - P11.85 million (Income Tax - P8.30 million and VAT – P3.55 million).

The case against DR. ALEXANDER EDUARDO REYES GARCIA is the 281st filed under the RATE program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares. It is likewise a RATE case of the National Investigation Division.

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Delinquent Software and Manufacturing Companies charged with willful failure to pay tax

Delinquent Software and Manufacturing Companies charged with willful failure to pay tax

The Bureau of Internal Revenue (BIR) today filed separate criminal complaints with the Department of Justice against two (2) delinquent corporate taxpayers (including their responsible corporate officers) - for Willful Failure to Pay Taxes under the National Internal Revenue Code of 1997, as amended (Tax Code).

Charged with violating Section 255 in relation to Sections 253 and 256 of the Tax Code were INTERACTIVE MOBILE AT EXTREMES SOLUTIONS COMPANY (INTERACTIVE MOBILE) and its responsible corporate officers – General Manager/Managing Director RINO JOSE G. CAPATI, Treasurer JASON ANTHONY P. VIDAURE, and Corporate Secretary MITCHELLE G. LIRAZAN. INTERACTIVE MOBILE is a Philippine corporation primarily engaged in designing, developing and selling software applications for mobile computing tasks and processes with registered address at 242 Cityland 8, 98 Gil Puyat Ave., Makati City. Together with its responsible officers, INTERACTIVE MOBILE was assessed deficiency tax liabilities for taxable year 2006 in the sum of P7.43 million, inclusive ofsurcharges and interests, broken down as follows: Income Tax (IT) - P4.36 million; Value Added Tax (VAT) - P2.97 million; Expanded Withholding Tax (EWT) – P73,089.16; and Compromise Penalty (CP) - P26,000.00.

Likewise charged with the same violation were EMERALD MULTI-RESOURCES & MANUFACTURING CORPORATION (EMERALD), its President ERNESTO R. CRUZ, Treasurer DIANNE WHIRLETTE N. PATRICIO, Vice-President CAYETANO J. VIRAYO, and Corporate Secretary VIVIAN V. ANDALUZ. EMERALD is a Philippine corporation primarily engaged in the manufacturing of automotive soft trim with registered address at No. 6 Carlo Drive, Bagumbayan, Taguig City. Together with its responsible officers, EMERALD was assessed deficiency tax liabilities for taxable year 2008 in the sum of P13.8 million, inclusive of increments, broken down as follows: IT – P9.44 million; and VAT - P4.36 million.

Documents submitted and filed by investigators of Revenue District Office Nos. 49 (North Makati) and 44 (Taguig City & Pateros) showed that the abovementioned respondents were served the corresponding Letters of Authority (LOA), Preliminary Assessment Notices (PAN), Final Assessment Notices (FAN) and Formal Letters of Demand (FLD) with Details of Discrepancies but failed to protest said assessments, hence making the same final, executory, unappealable, and demandable.

The subsequent issuance of the Preliminary Collection Letter, Final Notice Before Seizure, and Warrant of Distraint and/or Levy were ignored by the respondents, as the said tax assessments remained unpaid. The respondents’ obstinate failure and continued refusal to pay the long overdue deficiency tax assessments, despite repeated demands, constitute willful failure to pay the taxes due to the government.

The cases against INTERACTIVE MOBILE AT EXTREMES SOLUTIONS COMPANY and EMERALD MULTI-RESOURCES & MANUFACTURING CORPORATION, together with their respective responsible corporate officers, are the 282nd and 283rd, respectively, filed under the RATE program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares. These are likewise RATE cases of Revenue Region No. 8, Makati City.

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