September tax collections rise to P66.55B but still short of target—BIR

MANILA, Philippines—The Bureau of Internal Revenue fell slightly short of its tax-collection goal in September, saying tax evasion has remained a key problem that the government must fight more intensely.

“It is evident that there are still people who continue to pay less tax than what they are supposed to under the law. It is only fair to those paying correctly that we run after those that do not,” BIR Commissioner Kim Henares said in a statement.

The BIR reported on Monday that tax collection amounted to P66.55 billion in September, short by 0.7 percent from the goal of P67.04 billion.

The amount of taxes collected during the month, nonetheless, registered a 9-percent growth from the P60.95 billion collected in the same month in 2010.

The BIR said the year-on-year increase was attributed to measures implemented so far in 2011 to shore up revenue collection, such as tighter tax audits.

The collection in August brought the total for the first eight months of the year to P686.26 billion, short by one percent of the eight-month target of P694.15 billion.

The cumulative collection, however, marked a 13-percent rise from P607.33 billion in the first eight months of 2010.

“Our shortfall is slight, at only 1.14 percent of total collections, but it is a shortfall nevertheless. We will have to work even harder in the last three months of the year in order to meet our target,” Henares said.

The BIR is tasked to collect P940 billion in 2011. The target is consistent with the goal of helping the government reduce its budget deficit, which last year hit P314 billion.

For this year, the government aims to post a deficit of no more than P300 billion. Finance officials said the government is on track to post a full-year deficit of below P300 billion, but economists said underspending in the first half has been the reason for reduced deficit.

In the first semester, the government spent much less than stated under the expenditure program for the period.

Budget officials said this was because in the first half, the Department of Budget and Management (DBM) was scrutinizing spending proposals of line agencies. But now that the review of spending requests is over, the government can focus on accelerating spending in the remainder of the year.

Even with the underspending in the first half, the BIR is still pressed to meet its tax collection target for the year to support the government’s plan of accelerated spending in the remainder of the year.

The national government has pressed on the DBM to accelerate spending in the second half to push growth of the economy after it slowed down in the first semester.

The economy, measured in terms of gross domestic product, grew by 4 percent in the first semester. This was a slowdown from the over 8 percent registered in the same period in 2010.

The slow growth in the first semester prompted the government to cut its target for the year from the range of 5 to 6 percent, to a range of 4.5 to 5.5 percent.