Latest data from the Bureau of Treasury showed the shortfall from January to October at 27.94 percent higher than the P940.6 billion for the same period in 2020, when the government had to raise P2.855 trillion in revenues.
Albay Rep. Joey Salceda said the government will likely see the deficit at just P1.7 trillion when the year ends.
“The deficit cap is P1.9 trillion this year, or around 9.3 percent of gross domestic product. As of October, we are just at P1.2 trillion. That’s around 63 percent of the deficit, with just one quarter left,” Salceda said.
“That’s lower by around P200 billion, which is of course good for our fiscal space,” he said.
“It’s mostly good news, because the lower-than-expected deficit is largely due to revenue recovery.”
Salceda, chairman of the House ways and means committee, said the latest data from the Bureau of Treasury showed the shortfall from January to October at 27.94 percent higher than the P940.6 billion for the same period in 2020, when the government had to raise P2.855 trillion in revenues.
“After three quarters, we are now at 87.2 percent of that figure, or P2.49 trillion. I am confident we will be very close to 2019 levels, or pre-pandemic revenues, once all the revenues are totaled in,” Salceda told BusinessWorld.
Resiliency of tax system
“I credit this recovery in revenues to the resiliency of our tax system due to the comprehensive tax reform program,” Salceda said.
He said tax effort is likely to be the highest since 1997, the year when the first Comprehensive Tax Reform Program was enacted, under the Ramos administration. Tax effort is the ratio of tax collections to gross domestic product.
“We are probably hitting 14.8 percent tax effort this year. That’s higher than anything we have had since 1997. Every administration that confronted a crisis saw its tax effort decline. This administration improved tax effort during the crisis. That’s commendable, and partly due to the reform-induced resiliency of our tax system due to the record of landmark reforms we enacted.”
Strengthen enforcement
Salceda said the Committee on Ways and Means, which he chairs, will continue its efforts to strengthen enforcement and administration.
Salceda noted that the committee successfully initiated changes such as the Task Force against Fuel Smuggling, joint enforcement efforts by the Bureau of Customs and the Philippine Economic Zone Authority to prevent the abuse of ecozones as smuggling conduits, and stricter policies to prevent cigarettes for export from leaking to the domestic market.
“We were able to work with the tax agencies and other government offices to make changes to tax administration even without legislated reforms. This kind of partnership will continue in these final months of the administration.”
Salceda said his committee next targets are improved enforcement against food smuggling, coast guard and customs coordination, and the abuse of customs bonded warehouses.
“We’ll keep at it. I accept the reality that raising new taxes during these times is difficult. We will have to be stronger at enforcement and administration. The committee will persist on these areas, too,” he added.
Tags: #budget, #economy, #budgetdeficit, #BureauOfTreasury