Secretary Carlos Dominguez 3rd of the Department of Finance (DOF) has cited the crucial role played by the Bureau of Internal Revenue (BIR) under the Duterte administration, which has pledged to carry out meaningful reforms to make high economic growth sustainable and beneficial to all Filipinos.
Speaking at the 112th anniversary rites of the bureau, Dominguez said the BIR’s stepped-up collection drive is integral to three imperatives that President Rodrigo Duterte had enumerated in his first State of the Nation Address (SONA), which are to reduce poverty from 26 percent to 17 percent, to foster a law-abiding society and to achieve lasting peace with both the communist and Muslim separatist insurgencies.
He added that the BIR has a critical role to play in all these three SONA goals that the President wants to accomplish in his last 100 days in office in 2022.
Dominguez pointed out that the BIR needs to collect enough revenues for the Duterte administration to bankroll an infrastructure build-up that would energize the economy, attack poverty and create enough jobs for the people, including would-be rebel-returnees.
He said the BIR should also ensure that its collective drive would be free from corruption in line with the President’s quest for a law-abiding society.
Dominguez noted that the agency’s mandate of raising additional revenues to help bankroll the President’s reform agenda has now become doubly challenging because of a proposed lowering personal and corporate tax rates.
“The new administration decided to propose legislation to cut the tax rates for individual and corporate taxpayers,” he said during the BIR anniversary rites at the bureau’s head office in Quezon City. “This is necessary to improve our people’s purchasing power and make our companies competitive.”
“We should be able to compensate for the rate reductions by rapidly broadening the tax base and improving VAT (value added tax) collection efficiency,” Dominguez added.
In an earlier interview, he noted that the VAT rate in Thailand is a lower 7 percent but its share of VAT collections to the gross domestic product of 4.2 percent was similar to that in the Philippines, which indicates that collection in the Philippines remains inefficient.