The Philippine Online Chronicles

The Bureau of Internal Revenue (BIR) missed its target collection by almost five billion pesos for the month of August.

BIR chief Kim Jacinto-Henares said the BIR collected P87.93 billion, almost five billion short of the P92.2 billion goal, amid an increase of 11.2% from last year. This resulted in an eight-month haul of P619.71 billion, a 13.4% increase from last year but still short of the P627.11-billion target.

Henares said the drop is attributed to the decrease in tax collection because of the sluggish public spending. She also said that while they are exceeding last year’s performance, they still can’t offset the weakness of non-BIR operations such as sale of government securities at the Bureau of the Treasury.

"Despite the shortfall, it is important to note that our collections increased significantly in August, despite the fact that the economy only grew 3.4% in the second quarter," said Henares.

She added that she is targeting income taxes from self-employed professionals and that they are not considering amnesty.

"I am not in favor of that right now. We will only do it in the future if we see that people are really sincere in complying with the tax rules," she said.

Last year, the BIR implemented a two-month abatement period, waiving surcharges imposed on erring taxpayers. But during the last State of the Nation Address, President Benigno Aquino III cited the need to strictly monitor to self-employed sector.

Besides the failure to file income tax returns, Henares said they are “also targeting those who fail to issue invoices.”

"Anyone who sells products and services of P25 and above are obligated to issue official receipts, even if the customers don’t ask for it or if they don’t keep it,” she said.

Tax collection accounts for more than two-thirds of government revenue, counted as among the basis of the proposed budget for the next year.

The P940 billion collection goal was set by the inter-agency Development Budget Coordination Committee and is based on the projected 5 to 6 percent economic growth.

On Friday, the House of Representatives approved the P1.8 trillion budget slated for next year’s government operations, however, the economy is staying sluggish with a 3.4 percent growth rate for the second quarter, less than half the 8.9 percent last year. This was also attributed to sluggish spending, especially because of the delays in big infrastructure projects.

"We're performing well as far as the private sector (collection) is concerned," Henares said. "The sector that has to do with government...we have not been able to collect as much, something that is really beyond our control."

“If the measures that we have instituted are not sufficient to enable us to meet our monthly collection targets, then we would have to add some more. The measures that we are implementing are not static,” said Henares.

The BIR still needs to collect as much as P320.3 billion for the remaining for months. Hitting the full-year target means enabling the government to trim its budget deficit by around 3% of the gross domestic product (GDP) from 3.5% in 2010.

Credit rating agencies say the Philippines needs to raise its revenue-to-GDP ratio, the lowest among the five leading Southeast Asian economies to secure a better investment grade rating. Fitch upgraded Manila’s rating but to only one notch short of investment grade.