Wake Up, Philippines!

BIR misses target by a record P67b

Posted in BIR by Erineus on February 25, 2009

BIR misses target by a record P67b

By Lawrence Agcaoili

INTERNAL Revenue missed its collection target by P67 billion last year, a new record, and it blamed it on the slackening economy and the breaks the government had granted individual taxpayers to soften the impact of the worldwide economic slowdown.

“It was about P778 billion. Yes, it was below our [P845-billion] target for 2008,” Commissioner Sixto Esquivias IV said.

Last year’s shortfall was bigger than the bureau’s deficit in 2007, when it reached P52.2 billion.

The Finance Department tasked the agency to collect P845 billion initially, but lowered that to P810 billion later as a result of the economic crunch.

Finance Secretary Margarito Teves said government economists were now planning to further increase the budget deficit ceiling this year—to P178 billion—to spend more money to boost the economy.

That amount would represent 2.2 percent of the gross domestic product, and would be higher than the previously proposed P160 billion or 2.0 percent of GDP, Teves told a congressional hearing.

“A deficit of 2.2 percent of GDP is manageable,” he said.

The bulk of the deficit spending would go to build infrastructure, boost social services, recapitalize the central bank, and put more equity into the Philippine Deposit Insurance Corp. to increase its maximum deposit insurance to P500,000 from P250,000, Teves said.

Despite last year’s shortfall, Internal Revenue’s collections were still 9.02 percent higher than the P713.6 billion it collected the year before.

Malacañang appointed Esquivias last October to replace Lillian Hefti, and he assumed office the next month. That means he was in office for only two months last year.

“We are still feeling the impact of the increase in personal deductions and exemption of minimum wage earners,” Esquivias said.

“I understand there have been a lot of closures of establishments, and naturally, it will affect our collections from withholding taxes.”

The Philippine economy expanded by just 4.6 percent last year after zooming by 7.2 percent the year before, the highest in 31 years.

As a result, the government abandoned its plan to balance the budget in 2008 and postponed fiscal consolidation back to 2010, the original schedule.

By Lawrence Agcaoili
http://www.manilastandardtoday.com/?page=news4_feb25_2009

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: