Finance chief: BIR plays key role in economic thrust

The Bureau of Internal Revenue (BIR) will play a central role in realizing the Philippines “economic breakout” which requires an improvement in both tax administration and policy reforms in the agency to ensure a steady revenue stream for the Duterte administration’s ambitious program to modernize the country’s infrastructure backbone and accelerate poverty reduction, Finance Secretary Carlos Dominguez III said. 

Dominguez told BIR officials led by Internal Revenue Commissioner Caesar Dulay that the BIR is virtually “girding up for battle” in taking on this “daunting and heroic” role, which is why its revenue targets have been raised and primed to collect trillions of pesos in revenues to help fund programs under the Duterte presidency that aim to sustain the country’s high growth and liberate millions of Filipinos from poverty.

“The task placed upon our shoulders is a daunting one. It is also a heroic task. It enables us to play the lead role in the economic emancipation of millions of Filipinos,” Dominguez said at the BIR’s first semester regional command conference held at the Kingsborough International Convention Center in San Fernando City, Pampanga.

Also at the conference were Undersecretary Antonette Tionko; and deputy commissioners Nestor Valeroso, Jesus Clint Aranas and Lanee Cui-David.

Dominguez said that under the Duterte administration’s “economic breakout” strategy, the Department of Finance (DOF) and its attached revenue-generating agencies make up “the advance guard leading the charge to transform our country and liberate our people” from poverty.

“I trust all of us here today will deliver you best effort to help us meet our targets. The entire economic strategy relies on the BIR being able to do so. So prepare for a campaign like no other attempted before,” he told some 300 BIR officials and employees attending the conference.

Dominguez said BIR employees should keep “honesty, courtesy and service in mind” when undertaking their respective tasks, and reminded them that being incapable of change has consequences.

Taking advantage of favorable global and domestic trends, Dominguez said the Duterte administration’s objectives in investing heavily in infrastructure and human capital development tis to sustain growth at 7 percent so that the Philippines could become a high middle – income economy by 2022, and poverty incidence rate could be reduced to just 14 percent by that time(from 21.6 percent in 2015).

“The BIR, as you see, plays a central role in realizing the audacious economic program our government has embarked on. This is the reason targets have been raised and our organization is geared up to collect trillions,” he said.

“We are bearing the cornerstone of a strategy to emancipate our people from poverty,” he said.

Dominguez said the BIR’s P1.83 trillion collection goal for 2017 might seem quite steep, but even when this target is attained, it will still be moderate when compared to what other Southeast Asian economies generate in terms of revenues.

“The fact is our revenue effort has not been impressive for so many years. This is not entirely the Bureau’s fault. In as far as assuring robust revenue flows and a high tax effort, we need to dramatically reform both our tax administration and our tax policies. We need to evolve a tax collection system that is simpler, fairer and more efficient. We are trying to accomplish precisely that,” Dominguez said.

“While the infra program is the key to unlocking our economy’s growth potential, it cannot be undertaken without more robust revenue flows. On this consideration, we have aggressively pushed for tax administration reforms and submitted before the Congress a bold tax policy reform package,” Dominguez said.

He pointed out that the country’s international development partners are closely monitoring how the Duterte administration will perform in its revenue efforts given that embarking on a massive infra program will require a corresponding huge amount of outlays by the government, which can only be sustained by ensuring reliable revenue flows.