BIR collection target too high — Purisima

MANILA, Philippines – Revenue targets are high to keep the Bureau of Internal Revenue (BIR) personnel on their toes, according to Finance Secretary Cesar Purisima. 

“(BIR) commissioner [Kim] Henares and I agreed [that] there are a lot of taxes that are still not collected, that’s why we set the target high,” he said at the membership meeting of the Federation of Philippine Industries on Wednesday, June 19, highlighting inefficiencies in tax administration.

The BIR missed its tax collection targets 4 out of the first 5 months in 2013, with only the month of April beating the agency’s goal. 

In May, the government’s main revenue arm missed its P115.12-billion target by about 2.8%. It only collected P111.9 billion in taxes.

Despite missing the target, Purisima still lauded the BIR for collecting 18.35% more in May than what it did a year ago. 

“I’m actually happy with their performance. To be honest, if they hit their target, my question to myself is, maybe I set the target too low,” said Purisima, an accountant by profession.

The finance secretary explained that setting the target collection for taxes should ideally be the same growth rate as the country’s gross domestic product (GDP).

However, he qualified that this could only be possible once necessary economic fundamentals are in place, a state which the country is still yet to realize.

“You normally set the target (collection) that is aligned with GDP when you believe you’ve captured everything already. When things normalize, the target should be the same growth as the growth of GDP.”

“But as I’ve said, there’s still a lot of opportunities to improve tax collection,” he explained. – Rappler.com