COVID-19 slashes tax take by P1.7T as of end-2021 | Inquirer Business

COVID-19 slashes tax take by P1.7T as of end-2021

/ 05:30 AM February 05, 2022

Tax revenue losses resulting from the COVID-19 pandemic have reached a total of P1.72 trillion as of end-2021, according to the Department of Finance (DOF).

The new coronavirus inflicted a P785.6-billion dent in 2020 tax revenues, which widened to P929.9 billion in 2021.

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Even then, the DOF said in a statement the tax effort was pegged at 15.6 percent over a five-year period since the Duterte administration took over in mid-2016.

Tax effort pertains to the share of tax collections to the gross domestic product, one of the measures used to determine how effective the government is in collecting revenues to fund its priorities.

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According to the DOF’s Domestic Finance Group (DFG), tax effort during the Duterte administration was the highest compared to the three previous administrations—those of Joseph Estrada, Gloria Arroyo, and Benigno Aquino III.

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“This feat was achieved despite the global economic downturn spanning almost two years now because of the COVID-19 pandemic,” the DFG said.

If there were no COVID-19, the revenue effort between 2017 and 2021 would have reached an estimated 16.2 percent.

In 1999-2000 during Estrada’s abridged term, the tax effort was 12.7 percent, which fell to 12.1 percent during the decade of Arroyo and went up to 12.7 percent in 2010 to 2016 during the second Aquino presidency.

On a yearly average, Estrada’s tax effort was pegged a t 14.1 percent, Arroyo’s at 14 percent and Aquino’s at 14.3 percent .

“The Duterte administration’s emerging average is 14 percent from 2017 to 2021,” the DOF said. “Without the pandemic, the government under President Duterte would have reached an even higher average tax effort of 14.8 percent.”

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