World Bank wants no new tax measures

PHILIPPINE NEWS SERVICE — THE World Bank sees no need for the Philippines to push new tax measures despite the P53-billion collection shortfall in the first half of the year, saying it is confident the government can still meet its goal of trimming the budget deficit.

Jehan Arulpragasam, the Bank’s acting Philippine country director, said the Philippines should focus on improving tax administration rather than introducing new tax measures when the 14th Congress opens later this month.

“We think that a lot of improvement can come from better administration of the current measures,” Arulpragasam said.

“So I think the substantial scope would come from improving administration,” he said.

Finance Secretary Margarito Teves said earlier that the Philippines likely incurred a budget deficit of P37.7 billion in the year to June, overshooting the P31.3-billion projected shortfall by P6.4 billion due to weaker-than- programmed revenue collections.

Preliminary figures showed that total government revenues

rose 8.2 percent to P509.7 billion during the period, but that was P48.3 billion lower than the P558-billion goal.

Internal Revenue’s tax take improved by 4.7 percent, to P333.3 billion, but that was P40 billion short of the P373.3 billion programmed, while Customs collections retreated by 2.6 percent, to P79.6 billion, and was P13 billion short of the P92.6-billion target.

Government expenditures during the period went up by 9 percent, to P574.4 billion from P502.6 billion. That was P41.9 billion lower than the programmed spending of P589.3 billion due to huge savings from interest payments.

Despite the fiscal slippage in the first half, Arulpragasam said the World Bank was still confident the Philippines would be able to attain its goal of trimming the budget deficit to P63 billion, or 0.9 percent of the gross domestic product, this year from an eight-year low of P64.8 billion, or 1 percent of GDP, last year.

“On the fiscal side, I think the government hasn’t met the target that it set for itself,” Arulpragasam said.

“I know they are very focused on improving performance in the second half of the year, so we are confident that they will take the necessary measures and focus on improving revenues in the second part of the year,” he said.

Arulpragasam said the World Bank would continue to support the Philippine government in improving revenue collection as it had extended $11 million worth of grants to improve Internal Revenue’s collection efficiency.

“Certainly, we are supporting the Philippines’ efforts to improve on the fiscal side, which relates very much to the ability to extend social services to poorer households,” Arulpragasam said.