FDC scores government for poor revenue efforts

MANILA, Philippines - The cause-oriented group Freedom from Debt Coalition (FDC) has criticized the Arroyo administration for its poor revenue efforts, saying that despite the full implementation of the reformed value-added tax law and high yields from selling government assets, state revenues remain low.

FDC also called for a comprehensive review of the country’s entire tax structure due to low revenues despite regressive taxation.

FDC vice president Etta Rosales said despite the enactment of the Reformed Value Added Tax specified by Republic Act 9337 during President Arroyo’s second term, revenues did not pick up.

“Despite R-VAT and privatization, revenue effort didn’t pick up much. Was this because gross domestic product (GDP) under Arroyo is unrealistically high?” Rosales said, referring to FDC’s earlier critique that the government’s GDP computations are overestimated.

Rosales also said the target for tax effort in 2010 is “ambitious,” saying that while the administration is “expecting tax performance as low as 13.75 percent for 2009, it is dreaming of jumping to as high as 14.34 percent at the end of 2010.”

She expressed apprehension that the Arroyo administration could hit its target, citing the government’s “habit of missing tax targets.”

FDC, citing government data, claimed that for 2005, the state missed its tax targets by P13.7 billion; for 2006, by P20.5 billion; for 2007, by P70.2 billion; and for 2008, by P44.2 billion. For January to June of this year, it missed its tax target by P32.4 billion.