Visiting S&P team focuses on RP tax collections

by Prinz P. Magtulis, BusinessWorld

Posted at Oct 29 2010 12:52 AM | Updated as of Oct 29 2010 08:45 PM

MANILA, Philippines - The Aquino administration’s tax administration reforms were the focus of discussions between Philippine government officials and representatives of Standard & Poor’s (S&P) Ratings Services last Wednesday, officials yesterday said.

"We discussed on the plans of the government to improve tax administration -- our fiscal reforms and the tax measures we would implement," Finance Undersecretary Gil S. Beltran said in a phone interview.

He did not elaborate.

Mr. Beltran said "all economic managers" or their representatives joined the meeting, among them: Commissioner Kim S. Jacinto-Henares of the Bureau of Internal Revenue (BIR); Finance Undersecretary Rosalia V. de Leon; and Claro P. Fernandez, executive director the Bangko Sentral ng Pilipinas’ Investor Relations Office.

For her part, Ms. Jacinto-Henares said she presented her bureau’s thrusts, including the Run After Tax Evaders program, which aims to boost collections by deterring tax evasion through filing of cases against suspected tax dodgers.

"It was the first time I met them, and they asked questions about it, but they basically did not comment on it," Ms. Jacinto-Henares said by phone.

Credit rater S&P has maintained its "stable" rating for the Philippines, but warned last month of a downgrade if fiscal reforms instituted by the Aquino government would prove to be "more than temporary."

It had raised concern over "previously tried methods" to reduce tax evasion, noting that "administrative tightening" alone may not be enough to increase collections.

In the nine months to September, the BIR, which accounts for nearly 70% of total state revenues, collected P607.33 billion after surpassing its P59.9-billion September target by collecting P60.96 billion.

The Bureau of Customs, meanwhile, collected P190.84 billion in those nine months after it incurred a P6-billion shortfall against its September collection target of P26.563 billion.