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Economic conditions

Philippines Seeks Presidential Task Force to Boost Tax Enforcement and Collections

Strategic Insights

— 1 min read

A senior legislator has urged the Philippine government to create a Presidential Task Force on Revenue Projection and Collection, which would help systematically build up tax enforcement and compliance nationwide. The proposal comes as the administration's fiscal reform program is already in place, with the expanded value-added tax (VAT) set to take effect next month. The task force would aim to establish bold collection targets for each type of tax and revenue district, using data from various government agencies to project potential revenue and monitor performance.

Key Takeaways:

  • A Presidential Task Force on Revenue Projection and Collection is proposed to help the Philippine government systematically and quickly build up tax enforcement and compliance nationwide.
  • The task force would establish bold collection targets for each type of tax and for each revenue district, based on a study of potential revenues and an audit of actual against possible collections.
  • The task force would use data from the National Statistics Office, Department of Trade and Industry, Department of Transportation and Communications, Securities and Exchange Commission, and Philippine Ports Authority, among other agencies.
  • Local governments would be mobilized in systematic data gathering needed to boost national tax collections, with the President's direct involvement expected to inspire cooperation.
  • The expanded VAT, set to take effect next month, is seen to generate P95 billion (US$1.7 billion) to P125 billion in new revenue yearly at 70 per cent and 100 per cent collection efficiency, respectively.
  • The government needs only P80 billion in incremental revenue annually to wipe out the budget deficit within the next five years, according to the Department of Finance.
  • Negros Oriental Rep. Herminio Teves, House ways and means committee senior vice chairman, has stressed the need for government to ensure that the desired additional revenue from new legislation is properly collected.

Statistics:

  • A 22-percent drop in government's excise tax collections from tobacco manufacturers in the first quarter, despite the increase in cigarette imports.
  • The expanded VAT is expected to generate P95 billion (US$1.7 billion) to P125 billion in new revenue yearly at 70 per cent and 100 per cent collection efficiency, respectively.
  • The government needs only P80 billion in incremental revenue annually to wipe out the budget deficit within the next five years, according to the Department of Finance.
  • Local governments receive 40 per cent of all internal revenue.

Sources:

(PNA) 20-06-2019

Asia Pulse - June 20

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