MANILA, Philippines – The Bureau of Internal Revenue is bent on increasing its annual tax collection to P1.6 trillion by 2015. The target amount is about double the BIR’s tax take in 2010.
During the BIR’s 109th anniversary celebration on Friday, Revenue Commissioner Kim Henares took pride in the agency’s accomplishments in terms of shoring up tax collection, which funds more than half of the government’s annual expenditures.
Nonetheless, she said, there is ample room for the BIR to improve tax collection, particularly by undertaking more audits to detect tax evaders. The BIR said tax evasion and the under-declaration of income still posed a significant problem in the country.
“The work is not yet complete,” Henares said, referring to the bureau’s effort to increase tax collection. “We commit to double our 2010 collection by 2015.”
Last year, the BIR for the first time hit the P1-trillion collection mark. The P1.058 trillion it took in was about 15 percent higher than the previous year’s collection. Still, it was short of its P1.066-trillion collection goal by less than one percent.
This year, the BIR is tasked to collect P1.253 trillion.
In the first half of this year, the BIR failed to meet its monthly collection targets.
However, Henares said, the tax bureau believes that the full-year target is achievable.
“That is where our [tax men’s] eyes are at—the P1.253-trillion target. We are concentrating on hitting it,” Henares told reporters at the sidelines of the anniversary celebration.
Also, Finance Secretary Cesar Purisima has given the bureau an even more daunting challenge. He said the BIR’s tax take must reach at least P2 trillion by 2016, which is about double the tax bureau’s collection in 2012.
An annual collection of P2-trillion is what is needed to help the government raise its tax effort to 16 percent, Purisima said.
A closely watched economic indicator, tax effort is the proportion of tax collection to the country’s gross domestic product (GDP). In 2012, the tax effort was at 12.8 percent.
Purisima said a tax effort of 16 percent will allow the government to achieve its infrastructure development goals.
Public infrastructure spending in the country stood at only 2.5 percent of GDP last year.
Throughout Southeast Asia, average public infrastructure spending is 5 percent. Economists said the Philippines would need to catch up with its neighbors in terms of infrastructure spending if it would want to compete in attracting foreign direct investments.