IMF airs concern over RP's revenue stream

MANILA, Philippines - The International Monetary Fund (IMF) has expressed concern over the impact of the global financial crisis on the country’s revenue stream, Finance Undersecretary Gil Beltran said over the weekend.

Beltran and other Finance officials met with a visiting IMF team last week as part of the multilateral agency’s annual review of the country’s economic environment.

“They wanted to know the impact of the crisis on other sectors other than exports,” Beltran said.

The Finance executive briefed the IMF team that the global financial crisis has indeed affected businesses in general as seen in the decline in corporate income tax collections in the first three months of 2009.

Beltran cited as an example that corporate income tax contracted by 3.3 percent in the first quarter of the year, based on a sample of 100 corporations.

“There was negative growth in corporate income tax,” he said.

He said that in the first quarter of 2009, corporate income tax was down to P85.9 billion from P88.9 billion collected in the same period last year.

Beltran said the IMF team is still gathering data on the different indicators and has not made any recommendations yet.

Nonetheless, he assured the IMF team that the government is working on improving its revenue stream by asking Congress to raise taxes on alcohol and cigarettes, rationalize fiscal incentives and to simplify the country’s net income taxation scheme.

Earlier, BIR commissioner Sixto Esquivias IV said collections from almost all types of taxes are down except for value-added tax (VAT) and percentage tax.

VAT collections by the BIR in the first four months of the year amounted to P50.78 billion or below the revenue target for the period of P57.76 billion.

However, compared to the same period last year, VAT collections from January to April were up by 9.91 percent from P46.2 billion, data from the Finance department showed.

This brought the total BIR collections during the four-month period to P241.85 billion, down by 6.25 percent from the P257.97 billion collected in the same period last year.