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NEWS UPDATES 3 August  2010

Philippine tax push delayed

As tax collections falter, the Philippine Bureau of Internal Revenue (BIR) has pushed its 2012 plan to bring back the government’s tax effort to pre-Asian crisis levels. In a briefing, BIR Commissioner Kim Jacinto-Henares said the agency expects to hit its goal of a 15 percent share of tax collections in the country’s gross domestic product (GDP) come 2012 rather than this year.

Tax effort measures the government’s efficiency in collecting taxes, and is computed by dividing collections into GDP, which is the amount of goods and services produced in the country.

At present, the government’s tax effort stands at 13.8 percent, against the Asian average of 16 percent.

Department of Finance (DOF) Secretary Cesar Purisima said the government would make use of all the existing taxable transactions and goods to recover the $5 billion revenues lost to an inefficient tax system.

Last week, Jacinto-Henares said the BIR likely missed its already lower July tax collection target.

The previous administration set a higher target of P69.331 billion for this month.

But “in the event that we, at BIR fail to meet the collection target for July, we can recover it on the subsequent months,” Jacinto-Henares said.

“What is important is we could raise the total of P860.4 billion at end-year,” she said. In June, the BIR, which accounts for at least 80 percent of Philippine taxes, collected P59.366 billion, or P2.937-billion short of its P62.303-billion goal.

While the BIR is struggling with its collections, the Bureau of Customs (BOC) said it would bring graft and corruption in the agency by 80 percent in the next three years.

“I came from the private sector and I know I cannot eradicate graft and corruption overnight. However, with the indicators I’m seeing, I am bullish that I could trim graft and corruption to only 20 percent come 2013,” BOC Commissioner Angelito Alvarez said.

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