Gov't studying changes to '09 revenue targets

BusinessWorld

Posted at Feb 23 2009 06:57 AM | Updated as of Feb 23 2009 06:46 PM

Revenue targets may be added to the list of assumptions up for downward revisions as the global downturn takes its toll on the economy.

A senior Finance department official who requested anonymity said the change was necessary. A tax bureau chief said the agency had no knowledge of the move, but added that a lower goal would be welcome.

Revisions to the government's macroeconomic goals are expected to be announced on Wednesday during an economic managers' briefing.

The interagency Development Budget Coordination Committee met last Friday to discuss possible changes. Budget Undersecretary Laura B. Pascua that day said the inflation goal would be lowered while the deficit cap would be raised.

Asked if the Bureau of Internal Revenue (BIR) had sought lower revenue targets, deputy commissioner Nelson M. Aspe said "If you will ask us, we would welcome that ... it is probable but it is not for me to say if it has been set."

Lowering the BIR's collection goal, he said, was advisable since the global economic crisis has led to reduced business activity and therefore reduced tax collections.

The BIR is the government's main revenue-generating agency, followed by the Bureau of Customs (BoC) whose officials were not immediately available for comment.

The Finance official said forecasts on oil prices, interest rates, foreign exchange, and exports and imports would have to be taken into account in determining the new targets.

Last November, the government slashed the BIR's revenue target for this year to P910.9 billion from P968 billion, citing the expected impact of the global financial crisis and a tax relief measure for workers.

The BoC's target, however, was raised to P317 billion from P300 billion due to expectations of more imports and a weaker peso.

Last week, BIR's Mr. Aspe said the agency's regional offices were finding it hard to meet their targets due to slower economic activity, lower demand, and job losses.

Customs Commissioner Napoleon L. Morales, for his part, has cited the need to adjust revenue goals as imports are expected to weaken. — from a report by A. D. B. Romero