By Chino S. Leyco
The inter-agency Development Budget Coordination Committee (DBCC) expects the collections of the government’s two main tax agencies would breach the P3-trillion mark next year to support the country’s ambitious infrastructure plan.During the DBCC’s recent meeting, President Rodrigo R. Duterte’s economic team raised the collection target for the Bureau of Internal Revenue (BIR) in 2019, while maintaining the goal previously set for the Bureau of Customs.
Data from the DBCC obtained by Manila Bulletin showed, the BIR and the Customs bureau are expected to raise a record P3.007 trillion next year, slightly higher by 1.2 percent compared with the previously approved target of P2.971 trillion.
The DBCC, composed of the Departments of Finance, of Budget and Management as well as the National Economic and Development Authority, also revised upward its projected tax revenues for 2018 by 1.3 percent from P2.620 trillion to P2.654 trillion.
The higher than expected tax revenues this year is mainly due to the BIR, which is expected to bring in an above target collection.
The DBCC expects the BIR collect P2.073 trillion this year, higher than 1.6 percent compared with the agency’s target of P2.039 trillion.
In 2019, the economic managers tasked the BIR to raise P2.345 trillion, higher by 13 percent against the emerging revenue take this year and by 15 percent compared with the agency’s original collection goal.
For the Customs bureau, the DBCC is maintaining the agency’s collection program this year at P581.3 billion, while at P662.2 billion in 2019.
As of May this year, the BIR collection stood at P827.73 billion, while the Customs bureau already raised P229.34 billion.
Last week, the DBCC raised its deficit spending ceiling next year to support the government’s infrastructure program from 3.0 percent to 3.2 percent of the economy, as measured by the country’s Gross Domestic Product (GDP).
Carlos G. Dominguez III. (Bloomberg)
Finance Secretary Carlos G. Dominguez III said the two percentage point increase in deficit ceiling is aimed at maintaining the government’s “aggressive" spending strategy.
“That will sustain the momentum of the ‘Build, Build, Build’ program,” Dominguez said. “We assure our people that the government remains committed to fiscal discipline even as it pursue a high level of productive spending that will clear the way to high — and inclusive — growth.”
The increase in deficit-to-GDP ratio also raised the government’s nominal fiscal gap by 8.0 percent to P624.37 billion from the previous assumption of P579.23 billion.
Dominguez, however, explained that the rise in deficit spending will not impact the government’s current investment grade credit rating status.
For 2019, the government programmed its disbursements to hit P3.833 trillion, equivalent to 19.8 percent of GDP and higher by 16 percent compared with P3.369 trillion this year.