Gov't sets eyes on improving tax collection efficiency

ZAMBOANGA CITY, Philippines - Government moves to provide subsidies to help the poor amid rising food and fuel prices and to raise spending on infrastructure , while keeping deficit this year reined at P40 - P75 billion, has increased the pressure to boost its tax take, particularly by improving collection efficiency. "We need to provide more rice to our people because there is inadequate supply of rice [that is] domestically produced, and this will cost money. We need to have more resources to buy fuel at higher prices," Finance Sec. Margarito B. Teves, who visited this city to lead celebrations Thursday commemorating the country’s 110th Independence Day, said in an interview. "We estimated that, for 2008, we might need P75 billion more. The next question is how do we finance that P75 billion? So, our first option is to try to see whether we can generate more than the P1.236 trillion [spending program] that we presented to Congress [for this year] by trying to improve on collection efficiency," he explained. At the same time, rising world oil prices are expected to increase government tax collections from imports of this commodity. "We have expected additional revenues from the higher oil prices. For the year 2008, we might be able to generate additional P18.6 billion," Mr. Teves said. "And if it [increasing tax collections] is not enough, we will dispose some assets which were not included in our revenue program for 2008 [which was estimated to yield P31 billion]," he added, saying government "might accelerate" the sale of such assets as the state’s 100% stake in the Philippine National Oil Co.-Exploration Corp. and its remaining 40% stake in Petron Corp. The national budget this year is premised on at least P1.108 trillion in taxes and P127 billion in non-tax revenues. Of the tax collection target, the Bureau of Internal Revenue will account for 70%-80% at P885 billion, while the Bureau of Customs is tasked to collect the rest at P254 billion. Effects of a global economic slump and rising prices of food and fuel consumption and other economic activities have forced the government to defer its target this year for a balanced budget to 2010, and to cut its 2008 growth target to 5.7%-6.5% from the original 6.3%-7.0%. "Right now, the consensus forecast of most economists, both here and abroad, for the Philippines is at the low end," Mr. Teves said. Besides short-term contingency measures like directed subsidies, he said, the government is allocating P60 billion for the next three to five years to help achieve the country’s rice self-sufficiency target, which has been set at 2013. This year, he said, the government has already allocated about P10 billion to finance new technologies on rice seeds, irrigation facilities, and post harvest facilities. He said the part of the money will fund the Agriculture department’s "FIELDS" program, which stands for Fertilizer, Irrigation, Extension & education, Loans & insurance, Dryers and other post-harvest facilities, and Seeds. Camilo C. Leyba, regional head of the Land Bank of the Philippines, said in a separate interview that, for this year, the bank is allocating P300 million in loans for rice farmers in Zamboanga Peninsula. Thursday, an initial loan worth of P1-million was given to the Manicaan rice famer association here. "The bulk of the money will be given to farmers and rice farm irrigations in the provinces of Zamboanga del Norte, Zamboanga del Sur, and Zamboanga Sibugay," said Mr. Leyba. - Darwin T. Wee, BusinessWorld