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THE Philippines’ tax effort rose in the first half of the year
after the two revenue-generating agencies’ improved collections on
higher inflation, according to the Department of Finance (DOF).
DOF data showed that the country’s tax effort
stood at 14.6 percent in January to June this year, higher than the
reported 14.7 percent in the same period last year.
The Bureaus of Internal Revenue and of Customs
met their collection targets in the first six months this year
despite weaker economic growth but with the skyrocketing commodity
and oil prices.
Tax effort is the ratio of tax collections to
economic output as measured by the country’s gross domestic
product (GDP).
The BIR tax effort grew to 11.1 percent from
10.7 percent last year, while that of Customs likewise reached to
3.3 percent from 2.9 percent in the same period last year.
The government aims to raise its tax effort to
16.1 percent this year.
But the Finance department anticipate that the
country’s tax effort will decline next year due to the scheduled
reduction in the corporate tax rate.
Finance Undersecretary Gil Beltran said the tax
effort, defined as the share of taxes to the country’s GDP, will
ease to 15.2 percent from the original forecast of 15.4 percent.
The 2-basis points drop would be tantamount to a
P15-billion revenue loss from the 5-percent reduction in the
corporate tax rate next year from 35 percent at present.
Beltran said no bill was filed in Congress that
will suspend the implementation of the corporate income tax
reduction next year.
Despite the 5-percent cut, the government can
still manage to improve its tax effort in the years to come, the
Finance official said.
In the first seven months of the year the BIR
collections reached P453 billion, while Customs brought in P142
billion. Finance Secretary Margarito Teves said the BIR and Customs
enjoyed increases of 8 percent and 25 percent in collections
year-on-year.
But despite the improve in tax collection,
budget deficit shot up ten-fold last month due to the absence of
state asset sales during the period.
The government incurred a budget deficit of
P15.4 billion in July from the P1.6-billion surplus recorded in the
same month last year.
Teves said the wider deficit is due to the
P17.1-billion revenue windfall last year from the sale of
government’s stake in Philippine National Oil Co.-Energy
Development Corp.
-- Chino S. Leyco
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