Philippines Raises Tax Target

August 4, 2010 Taxation in Philippines

BW_Noynoy3The Philippines Bureau of Internal Revenue has publicized its intentions to raise the country’s tax ratio, through greater levels of efficiency in tax collection and stringent enforcement of compliance laws for taxpayers and Government staff .

The Bureau of Internal Revenue (BIR) of the Philippines has stated that it hopes to raise the national tax ratio (tax collection as a percentage of national GDP) to 15 percent within two years, from the current level of 12.9 percent. The goal will require increased cooperation and efficiency of both the BIR and the Bureau of Customs (BOC), which together contribute an approximate 95 percent of the Government’s total revenues. On August 2nd Kim Henares, Commissioner of the BIR, responded optimistically to the aim, saying that efforts will be redoubled to stamp out the occurrence of tax evasion in the Philippines. He jokingly added that the Bereau will have no problems pursuing taxpayers dodging their liabilities as “there are too many of them cheating.”

Speaking at the 106th anniversary of the Bureau of Internal Revenue, Benigno Aquino, President of the Phillipinnes, reaffirmed the BIR’s goal, but with a more pessimistic deadline of 2016. Kim Henares acknowledged Benigno Aquino’s position, but maintained that the two year time-frame will remain as the BIR’s internal aim.

Both the President and Kim Henares affirmed that in order to increase the tax collections through administrative efficiency, the Government will need to stringently enforce Lateral Attrition (LA) laws. If exercised to their full effect, the LA rules mandate that BIR and BOC staffs that miss minimum collections targets by 7.5 percent or more, will be dismissed from service. However, the President did emphasize that tax agency employees that exceed predetermined standards will be appropriately rewarded for their efforts.

Photo by thepocnews