THE GOVERNMENT?S TAX EFFORT FELL by 1.4 percentage points to 13.4 percent in the nine months to September as the gross domestic product (GDP) grew by 0.8 percent, data from the Department of Finance show.

The reduction came as revenue agencies continued to miss their collection targets.

The tax effort refers to the ratio of tax collection to GDP or the total value of goods and service produced and paid for within an economic territory in a given period.

From January to September, total tax collection reached P731.57 billion while GDP was valued at P5.34 trillion in current prices.

In the same period in 2008, tax collection amounted to P789.4 billion or 14.8 percent of GDP which was valued at P5.34 trillion.

This year, the Bureau of Internal Revenue?s collection accounted for 10.2 percent of GDP while the Bureau of Customs turned in an equivalent of 3 percent.

During the three quarters, the BIR collected P557 billion, which is 5.2 percent lower than year-ago level and also 39.2 percent lower than target.

The BOC earned P165.4 billion, down by 14.4 percent from year-ago earnings and 36 percent lower than its goal.

For 2009, the DOF hopes to raise the tax effort to 14.3 percent from the 14.1 percent achieved in 2008.

Last week, the International Monetary Fund?s Il Houng Lee said the tax effort was expected to drop this year to 12.7 percent.

Lee was the chief of an IMF mission that visited the country for regular consultations with government officials on the economy.