BIR says first-half revenue slightly below goal

Reuters

Posted at Jul 15 2011 04:05 PM | Updated as of Jul 16 2011 12:05 AM

MANILA, Philippines - The country's main tax agency's collections in the first half of the year were just below target, mainly due to lower revenue from state transactions such as Treasury debt sales, but were still 13.5% higher than a year earlier.

Revenues for June alone were around P67 billion ($1.6 billion), 2% below target but nearly 13% higher than a year earlier, the Bureau of Internal Revenue (BIR) said in a statement on Friday.

January-June collections were P458 billion, just below a target of P460.3 billion. The agency said it had a shortfall of P6.3 billion from state transactions such as the trade of Treasury bills and bonds and lower taxes from state-owned firms, which was only partly offset by improved revenue from sales and income taxes.

The BIR accounts for about two-thirds of state revenue.

The Bureau of Customs, the second largest revenue agency, said on Tuesday its collections in the first six months were 8.6% below target due to a strong peso and slower imports after Japan's twin disasters in March.

The Philippines has struggled to improve revenues that are weakened by widespread tax evasion and corruption and poor implementation of tax laws.

Finance Secretary Cesar Purisima has said the government was well on track to cut the budget deficit to 3.2% of GDP this year from 3.9% in 2010, even as spending is expected to accelerate in the second half.

Manila plans to cut the shortfall further to 2.6% in 2012 and to 2% by 2013, keeping it at that level until 2016 when President Benigno Aquino's term ends.

Last month, Fitch upgraded the country's credit rating to a notch below investment grade, one rung higher than ratings by Standard and Poor's and Moody's Investors Service.