The administration of President Gloria Macapagal-Arroyo is "confident that it will succeed" in addressing the revenue-generation shortfall recorded by the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) for the first half of this year.

This was stressed today by Press Secretary and Presidential Spokesperson Ignacio R. Bunye who said that "the Arroyo administration is taking very seriously the shortfall in revenue collection by the BIR and the BOC, and is taking steps to address this."

Bunye explained that while the government was "not on target for the first semester of this year," it nevertheless does "know what has to be done to get back on target, and we are taking the required actions."

"Our past performance has demonstrated our ability to address the challenges of revenue generation, and we are confident that we will succeed with certain adjustments having been made," he said.

Bunye made the above assurances in his weekly column "The View From the Palace," citing the 20-percent revenue growth in 2006 from the previous 2005 figure which, he said, was brought about by "this administration’s dedication and discipline to raise revenues."

"Revenues (in 2006) from collection efficiency and tax administration reforms alone reached P40.8 billion, about 0.7 percent of Gross Domestic Product (GDP) – higher than the conservative plan of 0.3 percent," Bunye added.

According to the Press Secretary, the administration’s "economic team is vigorously implementing the respective action plans for the BIR and the BOC with the support from our development partners to improve tax-collection efficiency."

Bunye mentioned six action plans, as follows:

• reviewing all rulings granting tax exemptions and preferential treatment to certain corporate taxpayers;
• intensifying the development of tax evation cases;
• verifying compliance with withholding tax rules by the country’s top 1,000 corporations;

• checking compliance with withholding tax rules by expatriates working in the Philippines;
• prohibiting BIR officials from issuing unnumbered rulings "which have been the source of graft in the past"; and
• closely monitoring taxpayers with declining tax payments.

"The President has made it very clear that she and her economic team remain committed to the economic reform program that produced 5.4 percent economic growth in 2006 and that has enabled the government to generate the revenue needed to invest in modern infrastructure and much needed social services," Bunye noted.

"The economy grew 6.9 percent in the first quarter from a year earlier, far exceeding market expectations and marking its fastest annual expansion in 17 years.  Sustained growth in foreign direct investments, which grew 18.5 percent to reach US$710 million in the first quarter, and registered foreign portfolio investments, which grew two and a half times year-on-year in the first five months to US$1.7 billion, are evidence that our strategy to reform our country and our economy is working," he said.

In an earlier revenue command conference last July 4 in Malacanang, President Arroyo ordered finance officials to attain the government’s P63-billion budget deficit goal and the P1.1-trillion revenue target for 2007.

Present at the command conference were officials of the inter-agency Development Budget Coordination Committee, the BIR, the BOC, and their mother agency, the Department of Finance.

Finance Secretary Margarito Teves is hopeful that despite tax collection shortfalls in the first half of 2007 – with the budget deficit likely to have reached P37-billion or P6.4 billion higher than the programmed P31.4-billion -- the full-year deficit and revenue targets could be attained via improved collection efficiency, aggressive privatization efforts, and more effective anti-corruption programs.

The estimated BIR shortfall from January to June 2007 was P40 billion; while that of the BOC was P13 billion. The two agencies have since mapped out their own actions plans to meet their 2007 revenue targets of P730 billion and P228 billion, respectively.

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