Finance Secretary Jose Isidro Camacho told reporters that the dismal performance of the Bureau of Internal Revenue (BIR) was due largely to the slow implementation of the administrative measure that was supposed to yield P16 billion.
"We’re not even one-fourth of the target," Camacho said.
The BIR had launched a package of administrative measures geared mainly to improve collection by an additional P16 billion through the implementation of efficiency measures and various audits.
However, the BIR has been having difficulties implementing these measures and thus far has been able to collect no more than P2.5 billion out of its target for the whole of 2002.
The slow implementation of these measures was partly offset by the good performance of the BIR’s audit on value added tax (VAT) payments which increased by 10 percent during the seven-month period.
The DOF also noted a 96-percent growth in its franchise tax collection due to the 7.8 percent increase in the nominal value added tax on utilities franchises during the first semester.
The Bureau of Customs also suffered an P11.2-billion shortfall during the January to July period, primarily due to the 9.9 percent decline in dutiable imports. As a result, the BOC collected P6.5 billion less than its programmed amount.
The BOC was expecting dutiable imports to increase by 14.3 percent in 2002 from $9.1 billion in 2001 to $10.4 billion in 2002. The actual volume, however, amounted to only $8.2 billion, 9.9 percent less than 2001 figures.
The BOC’s own administrative measures also yielded far less than anticipated, amounting to only P160 million compared to the P5.5 billion total that was expected to be collected for the whole of 2002.
BOC’s collection also took a P1.4 billion hit due to the appreciation of the peso since the bureau’s estimates were based on the assumption that the peso would average P52 to the dollar compared with the actual average of P50.58 to the dollar.
The decline in BOC’s collection was only partly offset by the increase in the importation of higher-tariff items which generated an additional P2.8 billion in revenues.
Despite the deep cuts in government spending, the Arroyo administration breached its full-year deficit target in just seven months, overshooting the year-end mark by P3 billion and incurring a deficit of P133 billion from January to May.
In July alone, the deficit stood at P13.386 billion, increasing by a whopping 180.98 percent from the P4.764 billion deficit recorded in July last year. The January to July figure, on the other hand, was 125.18 percent higher than year-ago levels recorded at P82.586 billion.
Camacho blamed the dismal performance of the government’s revenue-collecting agencies on the "resistance" of internal revenue personnel to the reform measures initiated by former BIR commissioner Rene Bañez.
The BIR registered a 21.6 percent drop in July revenues to only P30.2 billion.
The DOF had expected the deficit to slow down but the dismal performance of the government’s revenue collecting agencies actually accelerated the numbers as revenue collections in July alone fell 13.73 percent and by 2.25 billion in January to July compared to 2001 figures.
As a result, the DOF fiscal report showed that the actual deficit for the seven-month period flew way above the targets due to the combined effects of low revenue collection and high expenditures by government agencies.