Philippines confident in solving revenue shortfalls

Jul. 10, 2007

MANILA — The administration of President Gloria Macapagal-Arroyo is “confident that it will succeed” in addressing the revenue-generation shortfall recorded by the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) for the first half of this year.

This was stressed today by Press Secretary and Presidential Spokesperson Ignacio R. Bunye who said that “the Arroyo administration is taking very seriously the shortfall in revenue collection by the BIR and the BOC, and is taking steps to address this.”

Bunye explained that while the government was “not on target for the first semester of this year,” it nevertheless does “know what has to be done to get back on target, and we are taking the required actions.”

“Our past performance has demonstrated our ability to address the challenges of revenue generation, and we are confident that we will succeed with certain adjustments having been made,” he said.

Bunye made the above assurances in his weekly column “The View From the Palace,” citing the 20-percent revenue growth in 2006 from the previous 2005 figure which, he said, was brought about by “this administrations dedication and discipline to raise revenues.”

“Revenues (in 2006) from collection efficiency and tax administration reforms alone reached P40.8 billion, about 0.7 percent of Gross Domestic Product (GDP) higher than the conservative plan of 0.3 percent,” Bunye added.

According to the Press Secretary, the administrations “economic team is vigorously implementing the respective action plans for the BIR and the BOC with the support from our development partners to improve tax-collection efficiency.”

Bunye mentioned six action plans, as follows:

* reviewing all rulings granting tax exemptions and preferential treatment to certain corporate taxpayers;
* intensifying the development of tax evation cases;
* verifying compliance with withholding tax rules by the countrys top 1,000 corporations;
* checking compliance with withholding tax rules by expatriates working in the Philippines;
* prohibiting BIR officials from issuing unnumbered rulings “which have been the source of graft in the past”; and
* closely monitoring taxpayers with declining tax payments.

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