PH tax collection lags behind Asean: DOF

By ANGELA CELIS, Malaya, Jun 1, 2017

Assuming it could be achieved , the Philippines’ revenue collection target of P1.83 trillion — “quite steep” by standards — will still be moderate when compared to those generated by other Southeast Asian economies.

“The fact is our revenue effort has not been impressive for so many years. This is not entirely the Bureau’s (of Internal Revenue) fault. In as far as assuring robust revenue flows and a high tax effort, we need to dramatically reform both our tax administration and our tax policies,” said Carlos Dominguez III, secretary of the Department of Finance.

“We need to evolve a tax collection system that is simpler, fairer and more efficient. We are trying to accomplish precisely that,” he added.

The revenue effort in the first quarter rose by 0.26 percentage point to 14.89 percent from 14.63 percent, while tax effort improved by 0.42 percentage point, from 12.99 percent to 13.41 percent, with the DOF citing rising tax collection efficiency.

Dominguez underscored the importance of both tax administration and policy reforms in ensuring a steady revenue stream for the Duterte administration’s program to modernize the country’s infrastructure backbone and accelerate poverty reduction.

“The task placed upon our shoulders is a daunting one. It is also a heroic task. It enables us to play the lead role in the economic emancipation of millions of Filipinos,” Dominguez said at the BIR’s first semester regional command conference held at the Kingsborough International Convention Center in San Fernando City, Pampanga.

“I trust all of us here will deliver you best effort to help us meet our targets. The entire economic strategy relies on the BIR being able to do so. So prepare for a campaign like no other attempted before,” he told some 300 BIR officials and employees attending the conference.

Dominguez said BIR employees should keep honesty, courtesy and service in mind when undertaking their respective tasks, and reminded them that being incapable of change has consequences.

“The BIR , plays a central role in realizing the audacious economic program our government has embarked on. This is the reason targets have been raised and our organization is geared up to collect trillions,” the finance chief said.

To make the tax system simpler, fairer and more efficient, Malacañang has been pushing the swift approval of the first package of the Duterte administration’s Comprehensive Tax Reform Program (CTRP) in the Congress.

The House of Representatives is now holding plenary deliberations on House Bill 5636, which consolidated HB 4774—the original version endorsed by the DOF—with 54 other tax-related measures.

This bill aims to lower personal income tax rates and, at the same time, broaden the tax base by adjusting excise taxes for automobiles and fuel and lifting VAT exemptions except for education, raw food and health, and those enjoyed by seniors and persons with disabilities, among other measures.

“While the infra(structure) program is the key to unlocking our economy’s growth potential, it cannot be undertaken without more robust revenue flows. On this consideration, we have aggressively pushed for tax administration reforms and submitted before the Congress a bold tax policy reform package,” Dominguez said.

He said the country’s international development partners are closely monitoring how the Duterte administration will perform in its revenue efforts given that embarking on a massive infrastructure program will require a corresponding immense amount of outlays by the government, which can only be sustained by ensuring reliable revenue flows.