DOF sticks with P4.3 trillion revenue goal

MANILA, Philippines — The Department of Finance (DOF) is keeping its P4.3-trillion revenue target for the year, banking on non-tax measures even amid less optimistic expectations on overall economic expansion.

During the recent Economic Journalists Association of the Philippines-San Miguel Corp. Business Journalism Seminar in Baguio City, Finance Undersecretary and chief economist Domini Velasquez said the DOF did not revise the target for the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) in its latest meeting.

“We are sticking with the target. That is also the Secretary’s (Ralph Recto) matching order that we improve our BIR and BOC collections,” Velasquez said.

“We do recognize that it’s very challenging. That’s why we have non-tax revenues,” she said.

Last month, the Cabinet-level Development Budget Coordination Committee (DBCC) downgraded gross domestic product (GDP) growth expectations to six to seven percent from the previous goal of 6.5 to 7.5 percent.

Despite the economic team turning less optimistic on growth prospects, the DBCC did not reduce revenue targets at P4.27 trillion for the year.

Of that amount, at least P3.05 trillion should be collected by the BIR and another P1 trillion by the BOC. The remaining would come from non-tax revenues.

Velasquez said further boosting non-tax revenues is still part of the DOF’s intent to not impose new taxes.

“Non-tax revenues, for sure, are not forever. It’s buying us time to ensure that everything is in place to make sure that BIR and BOC collections will improve,” she said.

As such, the DOF emphasized the need for enhanced digitalization efforts and aligning practices with countries with advanced tax collection systems especially as the majority of consumers are shifting to e-commerce.

“That’s one of the things that we are looking at, how to improve tax collections in that sector, so administrative efficiency gains through digitalization of both BIR and BOC,” Velasquez said.

“Again, that takes a little bit of time. But, they have started that already. Hopefully, we can see the gains,” she said.

Non-tax revenues also include higher dividends from government agencies, privatization efforts and tweaking of fees and charges, as well as reforms to enhance revenue mobilization.

Data showed that revenue collections jumped by 14 percent to P933.7 billion in the first quarter from P818.7 billion in the same quarter last year.

BIR raked in P592 billion during the three-month period, up by 17 percent, while BOC’s collections inched up by two percent to P219 billion.

This year’s overall revenue target at P4.7 trillion is 11.6 percent higher than the 2023 collection of P3.82 trillion.

If realized, this would be equivalent to 16.1 percent of GDP.