MANILA, Philippines - The head of the country's main revenue collection agency expressed confidence that all collection targets for the first three months of the year will not just be achieved but exceeded.

Joel Tan-Torres, the commissioner of the Bureau of Internal Revenue, told reporters on Monday that the agency is expecting to end the first quarter with a 7% surplus in tax collections. He cited the robust tax collection performance in January and February this year, and its intensified campaign to plug leakages in the system.

Tan-Torres said that, based on initial data, it looked like the agency would exceed its P53.439-billion target goal for March translating to a strong performance for the entire first quarter of the year.

"We are quite confident that we may exceed our first quarter targets, as we did well in January and February. So far we have about P10-billion in excesses," he says.

The BIR is hard-pressed to meet its P830-billion collection target for 2010 as the government battles a ballooning budget deficit seen to hit as high as P300-billion this year.

Tan-Torres highlighted that several reforms to plug tax leaks have already been instituted since he took over the bleeding agency. These reforms include the automation of the BIR's system, the recently-announced lifestyle checks for individual taxpayers, and the withholding tax imposed on candidate's expenses for the May 2010 elections.

But tax chief added that the government will not survive on collection efficiency alone, especially with passage of several tax-eroding measures such as the VAT exemption on senior citizens and the reduction of corporate income tax from 35% to 30%.

To counter these tax-eroding measures, Tan-Torres said several tax enhancement measures are in the pipeline: the pending VAT on tollways and possible new taxes related to sunshine industries, namely, the BPO, tourism, entertainment, real estate, mining, and electronics industries.

"Kung patuloy itong mga tax-eroding measures na ito, kahit anong improvement namin, talo kami. (If these tax-eroding measures will push through, our tax collection performance will dip despite our reforms)," he said.

University of Asia and the Pacific economist Victor Abola agreed. He noted that the, given the May elections and the end of the Arroyo admistration, the newly elected leaders will have to prioritize either an increase in existing taxes or impose new ones as it takes over in June.

"This is a bitter pill that the public will have to swallow," Abola said.

"They (newly elected leaders) have to take revenue generation seriously. Kung hindi, babalik ang bansa sa debt spiral, kung saaan hindi titigil ang pagtaas ng utang ng gobyerno. Ang budget kakainin ng pagbayad ng interes sa utang, hindi na nila mailalaan ito sa edukasyon, infrastructure na kailangan para paunlarin ang bansa. (If the newly elected leaders will not take raising taxes seriously, the Philippines will return to the era of debt spiral, where bulk of the government's budget will be allocated for paying interest instead of investing in education and infrastructure)," Abola stressed.