RP tax effort to improve in 2010: Finance dept
abs-cbnNEWS.com | 08/17/2009 7:13 PM
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MANILA - The Finance Department is expecting the Philippines' tax effort to pick up by next year as it begins to see signs of recovery from the global economic crisis.
According to the agency, the country's tax effort is likely to improve next year to 14.3% of gross domestic product (GDP) from an expected 13.9% of GDP in 2009.
The tax effort is the ratio of tax collections to GDP. The indicator mirrors the government's ability to raise revenues for infrastructure and social services.
Tax collections are expected to reach P1.195 trillion in 2010 from this year's projected P1.082 trillion. The country's GDP, on the other hand, is seen to expand between 2.6% and 3.6% from this year's target growth range 0.8% to 1.8%.
As a result of the improved tax take, the government said the country's budget deficit is likely to decline to P233.4 billion or 2.8% of GDP next year from a record budget gap target of P250 billion for 2009.
Revenues
The Finance Department is expecting collections from the country's tax agencies to post growths next year.
Collections from the Bureau of Internal Revenue are seen to rise by 9.6% to P875 billion from this year's targeted P798.5 billion, while that of the Bureau of Customs are said to improve by 13.2% to P309.5 billion from P273.3 billion expected this year.
However, non-tax revenues are seen to drop by 10.6% to P139.9 billion next year from the projected P156.5 billion this year due to lower proceeds of big-ticket assets.
For 2010, the government is expecting to raise only P12.5 billion from privatization projects from about P30 billion targeted this year.
Expenditures, meanwhile, are seen to grow by about 5% next year to P1.569 trillion from P1.489 trillion expected in 2009 as the government increases spending to ease the effects of the economic slowdown.
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