Echoes From
BY JOHNNY DAYANG
Commending tax authorities
The numbers coming out of the fiscal sector in recent weeks seem encouraging, particularly that from the Bureau of Internal Revenue which indicated accelerated tax flows.
This is welcome development from an agency which has suffered from chronic underperformance in the past but whose importance to the national economy cannot be overemphasized.
BIR chief Kim Henares, an organically raised CPA-lawyer who once worked for the World Bank on forced circumstances, has revealed that revenue collection has reached a level of efficiency that previous governments tried but failed to realize.
It is not that Henares is now trying to trumpet this milestone but the agency did seem to have pulled off a collection stunt against a backdrop of no new or higher tax measures on already overburdened Filipino taxpayers.
When President Benigno Aquino III assumed office less than two months earlier he vowed to move revenue collection flows on the basis of efficiency alone. Some thought this was a reckless move.
Businessmen and corporations were ecstatic but economists and observers were skeptical that Malacanang could operate a full-service government like the President promised while keeping a lid on the budget deficit.
Governments typically raise taxes or borrow either locally or abroad to keep itself afloat, in which case interest rates rise and make it difficult for the economy to expand, reducing in the process even its own capacity to collect tax from the productive sectors. It’s not difficult to imagine a vicious cycle on this basis.
Now Henares is saying collections are up eight percent in the first seven months to P467.28 billion and that in July alone revenues once again grew by 10.80 percent to P63.813 billion or a turnaround from a year ago downturn.
It must be said the economy grew by only 7.3 percent in the first quarter, which means there was a collection efficiency of 3.5 percent, which also means the no-new tax policy or increase in tax rates could work after all.
This is good news for both businessmen and investors as they may now craft five-or six-year business plans knowing that tax policies and structures will work in their favor from hereon.
We commend the tax authorities for a job well done on this one.
Consequently, it might help Commissioner Henares to look closer in the causes why the government has been losing its cases against reported tax evaders.
BY JOHNNY DAYANG
Commending tax authorities
The numbers coming out of the fiscal sector in recent weeks seem encouraging, particularly that from the Bureau of Internal Revenue which indicated accelerated tax flows.
This is welcome development from an agency which has suffered from chronic underperformance in the past but whose importance to the national economy cannot be overemphasized.
BIR chief Kim Henares, an organically raised CPA-lawyer who once worked for the World Bank on forced circumstances, has revealed that revenue collection has reached a level of efficiency that previous governments tried but failed to realize.
It is not that Henares is now trying to trumpet this milestone but the agency did seem to have pulled off a collection stunt against a backdrop of no new or higher tax measures on already overburdened Filipino taxpayers.
When President Benigno Aquino III assumed office less than two months earlier he vowed to move revenue collection flows on the basis of efficiency alone. Some thought this was a reckless move.
Businessmen and corporations were ecstatic but economists and observers were skeptical that Malacanang could operate a full-service government like the President promised while keeping a lid on the budget deficit.
Governments typically raise taxes or borrow either locally or abroad to keep itself afloat, in which case interest rates rise and make it difficult for the economy to expand, reducing in the process even its own capacity to collect tax from the productive sectors. It’s not difficult to imagine a vicious cycle on this basis.
Now Henares is saying collections are up eight percent in the first seven months to P467.28 billion and that in July alone revenues once again grew by 10.80 percent to P63.813 billion or a turnaround from a year ago downturn.
It must be said the economy grew by only 7.3 percent in the first quarter, which means there was a collection efficiency of 3.5 percent, which also means the no-new tax policy or increase in tax rates could work after all.
This is good news for both businessmen and investors as they may now craft five-or six-year business plans knowing that tax policies and structures will work in their favor from hereon.
We commend the tax authorities for a job well done on this one.
Consequently, it might help Commissioner Henares to look closer in the causes why the government has been losing its cases against reported tax evaders.
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