House urges BIR to raise its target

The House of Representatives is pressuring the Bureau of Internal Revenue (BIR) to raise its revenue goal this year by P20 billion to P487 billion.

In a meeting last week, House ways and means committee vice-chairman Herminio Teves urged the BIR to increase its revenue target which he earlier said was too low.

Based on presentations made by the inter-agency Development Budget and Coordination Committee (DBCC), Teves said it is still possible for the country’s premiere tax collection agency to hike its target by P40 billion from the original programmed P447 billion.

But Finance Secretary Jose Isidro Camacho tossed the issue to DBCC to avoid antagonizing BIR Commissioner Rene Bañez who, on the other hand, has been insisting on trimming the agency’s goal by about P5 billion.

Any adjustment in the BIR target is a decision to be made by the DBCC, Camacho said.

Teves met with Bañez and other DBCC members (representatives from the Bangko Sentral ng Pilipinas, the Department of Finance, Department of Budget and Management and the National Economic and Development Authority) to explain studies of the Philippine Institute for Developmental Studies, a government think tank, and by the International Monetary Fund showing annual tax leakages of P100 billion up to P200 billion.

"Teves said that a P40-billion adjustment is just a pittance of total taxes lost from these leakages, especially since the BIR has not been aggressive in its collection functions," said sources from the DOF.

Bañez according to the same sources, will have difficulty persuading Congress to reduce BIR’s collection target considering the country’s economic managers are confident the country is on track with its goal of achieving a four-to 4.5-percent growth gross domestic product or GDP growth this year.

Despite a weak global economy, the country posted a 3.4 percent GDP growth last year.

Officials present in last week’s meeting said BIR should make sure its collections improve by 11.3 percent from 10.7 percent in the previous year.

BIR’s performance in the first two months this year however, raised doubts the agency can muster enough capability to post this double-digit improvement in collection.

Records show that growth in BIR collections steadily fell since 1997 when it averaged 13 percent to only 12.6 percent in 1998, 11.5 percent in 1999, 10.9 percent in 2000 and only 10.7 percent last year.

Last year, Bañez lobbied to reduce BIR‘s collection target by P20 billion to only P388 billion after government economic managers downscaled economic growth.

The DBCC already previously resisted BIR’s request to again cut this year’s target.

The DOF is relying on BIR’s collections to keep the budget gap within the programmed level of P130 billion this year.

Teves on the other hand, warns government to be more aggressive in collecting excise taxes on so-called sin products like alcohol and tobacco.

He is also pressing government to properly tax the local oil industry’s biggest players such as Petron Corp., Pilipinas Shell Petroleum Corp. and Caltex Corp., and even the emerging strong new players like Totalfinaelf Philippines, Seaoil, Flying V and Unioil. – Rocel Felix