THE government’s tax collections increased steadily in the six months to June, raising the ratio to gross domestic product (GDP) to 13.7 percent in the first half from 13.6 percent a year earlier, the Department of Finance (DOF) said on Monday.
Revenue collections also grew to 15.6 percent of GDP from 15.3 percent during the same period.
The DOF said sustained growth in revenue brought the fiscal deficit to 0.9 percent of GDP in the first six months of the year, well within the programmed ratio of 2.1 percent of GDP.
The DOF said both revenue and tax collections have outpaced the 9.2 percent nominal GDP growth rate for the first half of the year, with total revenues up 11.2 percent year-on-year and tax revenues up 10.5 percent.
By agency, collections by the Bureau of Internal Revenue amounted to 10.7 percent of GDP, while the Bureau of Customs and the Bureau of the Treasury recorded collections reaching 2.9 percent and 1 percent of GDP, respectively.
By committing to keep up the sound performance of the country’s revenue-generating agencies and follow through with the legislative agenda, Finance Secretary Cesar Purisima said he believes the Philippines is on track to meet its tax and revenue goals for the year.
Purisima said the figures also indicate that aggressive reforms begun late last year at the Bureau of Customs continue to translate to more fiscal headroom.
The programmed revenue effort for full-year 2014 is 15.7 percent while the programmed tax effort is 14.7 percent.
Purisima said there is still much room for improvement to achieve the government’s goal of a 16.6 percent tax effort in 2016 but that certain tax-eroding measures now pending in Congress could make it difficult for the government to hit the target.
“We call on our colleagues in Congress to advocate for fiscal responsibility to assure we do not fall back to the vicious cycle of fiscal erosion and slow growth which we have worked hard to get out of,” Purisima added.
The finance secretary said among the key legislative priorities of the government are the Rationalization of Fiscal Incentives bill, the Tax Incentives Management and Transparency Act, the Rationalization of the Mining Fiscal Regime, the Customs Modernization and Tariff Act, removing investment restrictions in specific laws cited in the Foreign Investment Negative List, as well as passing amendments to the Build-Operate-Transfer Law.