Gov’t hopes to boost ARMM tax take

MANILA, Philippines - The government is hoping to boost revenue collections from the Autonomous Region in Muslim Mindanao (ARMM) as part of efforts to fully exploit the full potential of the region and add fuel to the booming local economy.

During the Philippine Development Forum Monday, Finance Secretary Cesar V. Purisima underscored the need to raise tax revenue collections from the ARMM in order to fund development projects that will ensure the growth of the region.

This followed the government’s historic signing of the landmark peace agreement with the Moro Islamic Libration Front to create the new Bangsamoro political entity which replaces the ARMM.

 â€œA crucial component to this is to bid capacity in the ARMM area to improve the collection.  This is a major area of opportunity so we can help that region generate revenues to fund a lot of development projects that we believe are necessary so that we’ll realize the peace dividends,” Purisima said.

Purisima noted that the government only collected P1 billion in the whole ARMM area, which is composed of predominantly Muslim provinces such as Basilan, Lanao Del Sur, Maguindanao, Sulu and Tawi-Tawi.

 â€œWe in the government will have to contribute to this but we have to work closely with whatever structure we agree with so that the region will not become a loophole for national tax implementation,” he said.

The ARMM was earlier credited by the Commission on Audit for increasing its collection of local taxes, fees and other revenues to over P764 million in 2010, up 14  percent from the 2009 revenue collection. This was achieved despite low economic activities in ARMM, lower Bureau of Internal Revenue collections, and the implementation of the law exempting minimum-wage earners from paying taxes.

Purisima said there is a lot of optimism in the prospects of Mindanao with the signing of a deal that would put to end over four decades of Moro rebellion on the conflict-laden region.

The volatile peace and order situation in the area is one of the main deterrents to investors.

Analysts said the Bangsamoro could be a future hub of BPO-IT companies.

The government earlier said it was looking to generate at least $1 billion worth of investments from southern Mindanano within three years from the signing of the peace accord.  The investments could be in the education, banking and food sectors.