MANILA, Philippines - The government's efficiency in collecting taxes next year is seen to increase to its highest level since 1998, which would boost the country's bid to attain investment grade.
Finance Secretary Cesar V. Purisima said the government's tax effort for 2013 is projected at 13.8%, slightly higher than the 13.3% target for 2012.
He attributed the increase in tax effort to improvements in revenue collection by the Bureau of Internal Revenue and Bureau of Customs.
Used to measure the efficiency of tax ollection, tax effort is computed as a percentage of a country's gross domestic product. The government should be able to increase the amount of taxes it collects each time income levels increase.
"To achieve these improvements, total revenues will have to grow by 14.1% from 2012. Total tax revenues is projected to grow by 15.7%, the BIR and Customs are expected to post growths of 16.2% and 14.5%, respectively,” Purisima said.
DoF data shows the Philippines' tax effort has declined from 14.1% in 1998. In 2011, the tax effort was at 12.3%, higher than the 12.1% in the previous year.
Earlier, Fitch Ratings said the country's low revenue base is a key weakness in the sovereign credit profile, suggesting the need for a structural reform.