RP tax-take up, despite lower revenues

The government lost nearly P6 billion in the first three months the year, after the corporate income was reduced from 35 percent to 30 percent, according to the Department of Finance (DOF). Lower interest rates on financial instruments and deposits in the first quarter also cut the government’s revenue stream by P7 billion, it said. Despite such reductions in government collections, the department said Thursday that the tax-take from January to March rose by 12.3 percent, for 11.6 percent a year earlier. The tax effort measures the government’s collection efficiency, computed on the basis of the actual tax-take as percentage of local output, or the gross domestic product. The Bureau of Customs generated P21.8 billion in tax collections or P10.9 billion more than its target for the period. On the other hand, it posted a 3.13-percent tax effort ratio for the period, compared to 2.48 percent a year earlier. “However, it lost P2.3 billion from the implementation of the ASEAN Trade in Good Agreement, or ATIGA, and P2 billion from the stronger peso," the DOF said in statement. ATIGA is an agreement by members of the Association of Southeast Asian Nations or ASEAN to phase out the tariff on goods traded within the region. In January, the peso registered 46.028 per dollar on average. In March, however, the currency rose to 45.742, data from the Bangko Sentral ng Pilipinas showed. The BOC also did not gain from the tax expenditure fund (TEF) this year as the Philippines imported less rice than earlier expected that the actual TEF amounted to only P5.9 billion instead of P9.1 billion in the government's program. Tax expenditure is the revenue a government foregoes as in the case of duties on rice imported by the National Food Authority. VS, GMANews.TV