Government collections of P406-B in 9 months lower than target

The Department of Finance (DOF) reported that revenue collection reached P406 billion from January to September this year, or 7.8-percent better than the same period last year. However, it was still 0.9-percent lower than set targets due to the slowdown of the economy.

Full year revenue generation target is P558.2 billion with P388 billion coming from the Bureau of Internal Revenue (BIR). Full year budget deficit target was placed at P145 billion.

The DOF expects to raise P152.2 billion in the remaining three months through improved tax collections and proceeds from government’s privatization efforts.

To meet this year’s target as well as improve revenue collection in the long-term, the DOF and the BIR have introduced tax measures like the third party verification program, the expansion of the Large Taxpayers Unit, an expanded withholding tax system, the voluntary assessment program, and deployment of the metering system.

The third party verification program involves tapping other groups than government to create a database of taxpayers and an accurate database for tax returns.

The BIR is also in the process of expanding the coverage of the Large Taxpayers Unit to eventually cover 2,000 corporations from its existing 900. By 2002, government will already expand this to 1,300 corporations with the establishment of Large Taxpayers Units in other urban centers like Cebu.

The withholding tax system on salaries and wages was expanded to include more taxpayers and top withholding tax agents. Government estimates that this should result in an additional revenue collection of P0.6 billion.

It also hopes to earn an additional P2.5 billion from the metering system. Metering machines are being deployed in some of the country’s major commercial and universal banks to implement the electronic metering system for the collection of the documentary stamp tax (DST). This will be expanded to cover airlines, the shipping and insurance industries.

Meanwhile, the finance department said it expects to earn between P12 billion to P13 billion from the sale of a piece of property managed by the Philippine Estates Authority (PEA).

In the long-term, government hopes to improve the financial health of the country with the passage into law of four legislative proposals. These are: Securitization Code, the Personal Equity Retirement Act (PERA), the Revised Investment Company Act, and amendments to the Securities Regulation Code.

Revisions in the Investment Code would help develop the mutual fund industry while the PERA would introduce a tax-sheltered, long-term savings instrument for employer-sponsored retirement plans and a pension scheme for the self-employed.