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THE
International Monetary Fund is optimistic Philippine
revenue collection in 2007, based on efforts done the
past year, would go past the P1-trillion mark for the
first time, so that it believes this augurs well for
sustaining the forward momentum of the economy.
The
Fund’s resident representative in
Manila,
Reza Baqir, said Thursday the reforms singlemindedly
pursued by the Bureau of Internal Revenue in the
immediate past puts government in a position to achieve
its tax goals this year. The government aims to collect
at least P1.028 trillion this year on the assumption the
tax effort would further rise to 15.3 percent of the
gross domestic product, significantly higher than last
year’s 14.3 percent.
The
improved collection efficiency should allow the
government to limit the budgetary shortfall this year to
just P63 billion, which is not even one percent of GDP,
from last year’s 1.4 percent, noted Baqir.
Against
this background, Baqir reiterated the need to accelerate
the tax reform momentum to help boost the pace of the
fiscal consolidation process. “Our sense is that new tax
policy measures are still needed in 2008 to help balance
the budget.”
He added
the period immediately after the elections in May “could
be used to increase the effort needed to balance the
budget.”
Baqir
said the Fund’s directors, in lauding the marked
increase in tax collection last year, also “regarded
continued expenditure compression as neither desirable
nor sustainable given the country’s sizeable social and
infrastructure needs. . . Looking ahead, they considered
that balancing the budget, while increasing public
spending, will require accelerating the implementation
of tax administration reforms as well as new tax
measures, such as the rationalization of tax
incentives.”
The IMF
released on Thursday its assessment of the Philippine
economy, saying that for the first time in 45 years, it
no longer needs the Fund’s financial aid. Manila had
completed in January the so-called Article IV
consultations with the IMF, which are once-a-year visits
in countries that no longer have outstanding loans with
the multilateral financial institution. |
