Henares vows to work harder to meet targets
Carlo S. Lorenciana (The Freeman) - August 16, 2015 - 10:00am

CEBU, Philippines – The chief of the Bureau of Internal Revenue (BIR) claimed there are factors that are affecting the agency's tax collection efforts but said it will continually work hard to reach its target for this year and next.

BIR Commissioner Kim Jacinto- Henares cited that revenue collection depends on various factors such as interest rate, government spending, tax measures and other circumstances that may affect it.

"We can't really predict what will happen but what we can assure everyone is we will work hard...until the last day of the year," Henares said in an interview during her visit in Cebu last Friday.

"If we reach it (target) well and good, if not then we will explain why we didn't reach it," she said.

"There's a lot of things that go into it (revenue collection)," the official further said.

For instance, Henares cited, the port congestion in 2014 had affected the revenues of large companies, thus affecting also government revenue.

The government, the revenue chief said, also plays a key role in the tax system.

"When the government underspends we can't collect also because the government is one of the biggest payers of taxes. It's the greatest multiplier of the economy. [If] the government does not spend, the velocity of the economy slows down," explained the country's chief tax collector.

Henares made an emphasis on law enforcement as the key to sustain revenue collection growth, noting the BIR has transformed from a customer-centric into a law enforcement-centric agency. "We strictly implement the law," she said.

Henares also pointed out the absence of new tax measures that would help boost revenue growth also affects the bureau's collection.

"Tax measures are all exemption," Henares noted, referring to the passed revenue-eroding measures such as the expanded exemption on workers' benefits and the P82,000-tax exemption cap on 13th month pay and other bonuses.

The BIR, which accounts for around 70% of total government revenues, had already warned that these measures are expected to result into foregone revenues.

The BIR had slashed twice its 2015 tax take goal, which was originally at P1.72 trillion then downgraded to P1.704 trillion to the current P1.674 trillion, due to the approved tax-eroding measures.

BIR's collections in the first half of 2015 hit P705.87 billion, up 10% compared last year but 13% short of the target for the six-month period of the year.

Despite falling short of the target, Henares explained the agency's collection growth is always higher than the nominal GDP.

Philippine GDP slowed to a three-year low in the first quarter of 2015 to 5.2% due largely to the decline in public spending and dismal growth in the agriculture industry. Last year Philippine economic expansion grew 6.1%.

The commissioner made mention the BIR-13 in Cebu City is one of the revenue regions that has been performing well, crediting it to Cebu's increasing economic activity which translates to more taxes to be collected. "But there's still a lot of rooms for improvement," she said.

BIR-13's collections in the first semester of the year grew 8% compared last year to P11.6 billion but fell short by 11% of the government's P12.99-billion target for the period.

Meanwhile, the national government has programmed the collections of the country's two key revenue-generating agencies -- the BIR and Bureau of Customs (BoC) -- to post double-digit growth next year.

According to the 2016 Budget of Expenditures and Sources of Financing data from the Department of Budget and Management (DBM), the BIR is tasked to rake in P2.026 trillion in 2016, up 21% from its P1.674-trillion target for 2015.

This year's target is equivalent to 12% of the gross domestic product (GDP). The 2016 target breaches the P2-trillion mark for the first time.

The BoC is also expected to collect P498.7 billion next year, a 14% rise from its P436.6-billion target for this year.

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