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TO
finance President Arroyo’s social-payback agenda and
balance the budget by 2008, the government must go back
to basics and increase tax collections, the
Congressional Planning and Budget Department (CPBD) has
proposed.
In its
budget briefer titled “Financing the Social-Payback
Agenda and Closing the Budget Gap: A Balancing Act”
transmitted to the House of Representatives, the CPBD
also said that given the current collection efficiency
of the Bureau of Internal Revenue (BIR) and the Bureau
of Customs (BOC), revenue targets and consequently a
balanced budget will not be met.
“However, there may be wisdom behind setting high
targets, as long as realistic parameters are used.
Relatively low assumptions could render tax-collecting
agencies complacent in improving their performance. Low
fiscal assumptions could actually become self-fulfilling
and degenerate into a spiral of low targets and poor
performance.”
The
House think tank added that proceeds from privatization
may help improve the fiscal position but it is, at best,
a short-lived measure, as sale of assets is a one-off
deal.
Total
revenues for next year are projected to grow by 10.5
percent, from P1.12 trillion to P1.24 trillion. Of these
amounts, the CPBD said P845 billion or 68.3 percent
would come from tax collections of the BIR, P254.5
billion or 20.6 percent from Customs, and a little less
than 1 percent or P9.5 billion from other tax-collecting
agencies.
“In
order to attain the tax-revenue goal, BIR and BOC must
exceed their 2007 collection targets by around 14
percent,” it added.
The CPBD
said nontax revenues would decline by 12.3 percent to
P127.3 billion from P145.2 billion, but only because the
2007 revenue program has been revised primarily because
of the favorable results of the sale of government
assets.
As of
August, it said, proceeds from privatization were P42.2
billion against a full-year original target of P25.3
billion or a surplus of P16.9 billion.
Assets
sold so far include the Philippine Telecommunications
Investment Corp. (P25 billion), 20 percent PNOC-EDC
common shares (P15.1 billion), PNP shares (P0.99
billion) and the old
Iloilo
Airport
(P1.2 billion).
As for
the revenue target of the BIR, the CPBD said that it has
been reduced by P24.6 billion owing to several factors
such as the utilization of excess input tax credits,
impact of lifting the 70-percent cap, unrealized
economic assumptions on inflation rates, and
lower-than-programmed interest rates on Treasury bills
and bank deposits.
It said
that the Customs collection goal has also been scaled
down by P5 billion because of the strength of the peso
against the US dollar. “The Department of Finance
estimates a revenue loss of P2.7 billion for very P1
appreciation in foreign exchange.”
The CPBD
proposed that Congress consider amending certain tax
laws and exercise its oversight powers, particularly in
tax collection, on the financial performance of
Government-Owned and -Controlled Corporations, and the
national government debt management strategies.
The
House of Representatives over the weekend approved on
second reading the P1.227-trillion national budget.
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