As President Benigno Aquino’s government abides by his original promise not to introduce any new taxes in the first three years of his administration, the Philippines’ Bureau of Internal Revenue (BIR) will have to rely on improved tax compliance and two tax reforms to reach its increased revenue targets next year.
The 2013 budget plan worked out by the Development Budget Coordination Committee appears to show that no new tax measure will be required during the year. Instead, apart from an improvement to tax administration, the government will look to the passage through parliament this year of the ‘sin tax’ bill (reforming the excise taxes on tobacco and alcohol products) and the reduction of tax incentives in the tax code, to provide additional revenue during next year.
The efforts to improve tax compliance include the BIR’s ‘Run After Tax Evaders’ campaign, where over 100 cases have already been started, and its other efforts to collect more funds from particular sectors in the economy, such as traders and professionals.
Total targeted revenue in 2013 is being set at some PHP1.78 trillion (USD42.7bn), with almost PHP1.24 trillion being expected from the BIR. This compares with the BIR’s 2012 target of PHP1.07 trillion, and would need a 16.2% growth in tax collected. The ratio between tax revenues and the country’s gross domestic product is expected to improve to 13.8% in 2013, as against the targeted 13.2% this year.
