Gov’t tax effort settles at 13.7%

The government’s tax effort jumped in the first three quarters of the year largely due to the significant rise in the Bureau of Internal Revenue’s collections.

The tax effort, which is the proportion of taxes and duties to the gross domestic product, settled at 13.7 percent as of the end of September—up from the 13.1 percent reported in the same period of last year, the Department of Finance reported on Monday.

The government is bent on further improving its tax effort—a closely watched indicator of a country’s credit worthiness—as it hopes to regain the pre-Asian crisis level of at least 15 percent, Finance officials said.

The DOF earlier reported that the BIR collected P897.95 billion in the first three quarters of the year—up by 16 percent year-on-year.

Among the line agencies, the BIR is the biggest contributor to state coffers, accounting for about 88 percent of total revenues in the first three quarters.

The DOF said measures to curb tax evasion and the law slapping higher taxes on cigarettes and alcoholic beverages greatly contributed to the increase in the BIR’s collections from January to September.

For years, the Finance department, parent agency of the BIR, lobbied for the passage of the Sin Tax Reform bill, citing the need to shore up government revenues in support of social services and infrastructure projects.

It noted that “sin” tax rates in the Philippines were much lower than those in other countries.

The law took effect last January.

Also, the BIR stepped up its campaign against tax evasion by regularly filing cases against suspected tax cheats and publishing print advertisements that detailed the payments of various industries.

The Bureau of Customs, which collects the tax and duties on imports, accounted for the balance of the government’s revenues.

The BOC collected P224.45 billion in the nine months to September period, up by 5.1 percent year-on-year.

But the growth in customs collections still fell below the target set for the agency.  Michelle V. Remo