While revenues from Value Added Taxes (VAT), which comprised 24.6 percent of the total collections, improved by 23.3 percent, this was not enough to offset the declines in collections from the other forms of taxes. Specific tax collections alone registered a very significant drop of 23.8 percent, and was further aggravated by the 31.7 percent tumble in other tax collections. But what really brought the collections down was the fall in income tax revenues which constituted 53 percent of the total tax collections.

Pangasinan, which generated 56.0 percent of the total revenues in the region in 1999, fell short from its1998 collection by 5.2 percent due to the downswing in the collections for other taxes which declined by 34.3 percent.

While the three provinces were dealt with falls in their revenue collections, Ilocos Sur got a big lift from the marked increase in its value added tax collections which helped surpass its revenue the previous year. The province’s total revenue income of P294.0 million was higher by P37.6 million than 1998’s sum while VAT collection was higher by P41.1 million.

The change in the tax payment process might have also contributed to the decline in the region’s revenue collections. The central offices of large businesses now pay taxes instead of paying at the regional offices directly to the revenue districts where they operate.

Percentage Tax - business tax measured by a given ratio between the gross sales or receipts and the burden imposed on the taxpayer

Specific Tax - an excise tax imposed on certain goods based on weight or volume capacity or any other physical unit of measurement. It applies to alcohol products, tobacco and tobacco products, and petroleum products

Value Added Tax - business tax levied on certain goods, properties and services

Other Taxes – include withholding tax, capital gains tax, donor’s tax, estate tax and documentary stamp tax

Source: Bureau of Internal Revenue, Central Office