MANILA: The government’s revenue target may need to be reviewed because of the decline in world oil prices and other measures that may erode collections of revenue generating agencies.
Budget Secretary Florencio Abad told reporters in a chance interview the government may have to review its revenue targets.
“We have to sit down again and look at it, including increased exemptions from bonuses and similar allowances,” he said. The Bureau of Internal Revenue (BIR) has slashed its revenue projection for the year to P1.674 trillion from P1.72 trillion after a measure raising the tax exemption on the 13th month pay and other bonuses of workers in both private and public sectors to P82,000 from the current P30,000, was approved by President Aquino.
Earlier, the BIR was looking to collect P1.724 trillion this year but trimmed the projection to P1.704 billion due to the expected P16.9 billion losses from the higher exemption of workers’ de minimis benefits from income tax.Latest available data showed BIR collections as of end-November amounted to P1.2 trillion, up nine percent from the same period last year.
The interagency Development Budget Coordination Committee composed of the Secretary of Budget and Management, National Economic and Development Authority Director General, Executive Secretary, Secretary of Finance and Bangko Sentral ng Pilipinas Governor, has set a P456 billion revenue target for the BOC this year. Based on preliminary data, Customs commissioner John Sevilla said the BOC likely generated P370 billion worth of revenues last year, up 20 percent from 2013’s collections, but lower than the agency’s target of P408.1 billion.
“We just hope that that erosion will not continue with more populist bills being passed in Congress,” Abad said, noting that Congress is also looking at how to increase exemptions from the personal income tax. “As I said, the principle that should govern is fiscal responsibility. As we find ways to reduce tax burden of certain sectors of society, we also have to find ways to increase revenue so we don’t erode fiscal position,” he added.
