That ballooned the deficit to P321.5 billion in the first quarter compared with just P86.2 billion same period a year ago. A deficit happens when revenues generated fall short of spending and in March, that was more obvious with a 17.37% year-on-year drop in state earnings. Treasury attributed the revenue slip to high base effects propelled by last year’s remittance of dividends from government firms. CREATE reduces corporate tax rates to 25% or 20%, depending on firm size, from 30% in hopes savings will be funneled toward recovery. With consumers still largely prevented from going out, and some enterprises still closed, tax receipts are bound to fall, compounding the impact of lower tax rates.

Source: Philippine Star April 27, 2021 06:00 UTC