DBCC will review its turnover targets

THE GOVERNMENT is maintaining its revenue targets for now, although a review by the Development Budget Coordination Commission (DBCC) is scheduled for next month.

“We stick to the objectives. [We] will make a review [by the] End of June,” Treasury Secretary Ralph G. Recto told reporters in a Viber message on Monday.

This comes as the Department of Finance (DoF) reiterated that it would not implement any new tax measures to prevent driftFlat.

Treasury Undersecretary and Chief Economist Domini S. Velasquez said over the weekend that the DoF would rely on non-tax revenues to meet collection targets.

“Non-tax revenue is actually a short-term solution… We expected that this year. I think the intention is not to impose new taxes,” she said during a forum organized by the Economic Journalists Association of the Philippines and San Miguel Corp. this weekend.

The DoF has been looking for ways to raise much-needed revenue as Mr Recto previously said he does not plan to introduce new taxes this year.

Ms Velasquez said the DoF has no intention of “intruding”.F‘inducing’ taxes.

“We recognize that (the objectives) are challenging. That is why we have the non-tax revenue,” she added.

Non-tax revenues refer to the collections of government services, including regular fees and service charges, the privatization of state assets, and dividends from government-owned and controlled enterprises (GOCC).

The latest data from the DoF shows that non-tax revenues reached $206.4 billion in April.

The agency has proposed initiatives to increase non-tax revenues. Last week, Mr Recto proposed selling the government’s stake in the Subic-Clark-Tarlac Expressway (SCTEx) to state pension funds.

The DoF also increased GOCCs’ mandatory dividend payments to the national government from 50% to 75% of their annual net income by 2023.

Ms. Velasquez said the focus on non-tax revenues would “buy time” for the department to ensure revenue-generating agencies can improve their collections.

The Bureau of Internal Revenue (BIR) is tasked with collecting P3.055 trillion, while the Bureau of Customs’ (BoC) revenue target is close to P1 trillion.

In the FIn the first four months of the year, the government collected revenues of P1.4 trillion, or nearly a third of the target for the entire year, Treasury Department data show.

The BIR had collected P912.9 billion by the end of April, which was not enough to meet its P1.03 trillion target for the period.

On the other hand, the BoC collected 229.67 billion euros, exceeding its target of 288.53 billion euros by 3.86%.

Ruben Carlo O. Asuncion, chief economist of Union Bank of the Philippines, Inc., welcomed the DoF’s plan not to impose new taxes.

“New taxes are unpopular. People would not want new taxes, especially since inflation and interest rates are high and impacting almost everyone’s spending,” he said in a Viber message.

Eleanor L. Roque, tax director of P&A Grant Thornton, said the government’s ability to raise enough revenue without imposing new taxes depends on the efficiency of its collection.

“If there are untaxed sectors or inefficiencies in collection efforts, the government can focus on closing loopholes and increasing collection,” she said in a Viber message.

“The government must also take into account global tax developments such as BEPS (base erosion and profit shifting) to ensure that taxes payable in the Philippines are not paid to other jurisdictions just because we are late in implementing BEPS ” she added.

To improve tax collection, Ms. Roque said the BIR must ensure that it has adequate staff or infrastructure to assist taxpayers and improve tax collection.

Meanwhile, the Treasury Department is also exploring ways to improve tax collection on electronic trading platforms, drawing on best practices in other Asian economies.

“It can be missed [revenues] in e-commerce, especially those who have moved out of physical stores and are now selling online,” Ms. Velasquez said in mixed English and Filipino.

In a statement, the ministry said it is working to adopt digitalization best practices from South Korea, Singapore and Japan to improve tax collection.

The DoF will also meet with the Securities and Exchange Commission and the Bureau of Local Government Finance to “establish a comprehensive data sharing agreement.” — Beatriz Marie D. Cruz