Diokno to BIR: Strong revenue collections, fair and efficient tax administration vital to achieving fiscal targets

Finance Secretary Benjamin E. Diokno emphasized the importance of maintaining good revenue performance in achieving the Ferdinand Marcos Jr. administration’s goals set in the Medium-Term Fiscal Framework (MTFF) during the Bureau of Internal Revenue (BIR)’s 119th Anniversary on August 1, 2023 at the Philippine International Convention Center (PICC) in Pasay.

“Guided by the Medium-Term Fiscal Framework, the administration of President Ferdinand Marcos Jr. aims to achieve three headline goals by the end of its term: one, reduce debt-to-GDP ratio to 51 percent; two, bring down the deficit-to-GDP to 3 percent; and three, cut the poverty incidence to single digits. Maintaining a healthy level of revenues is vital to the attainment of each of these targets,” he said in his keynote message.

The MTFF, crafted by the economic team within the first month of the PBBM administration, serves as the government’s blueprint to bring down the debt-to-GDP ratio to less than 60 percent by 2025, cut the deficit-to-GDP ratio to 3.0 percent by 2028, and maintain infrastructure spending at 5 to 6 percent of GDP.

According to the Bureau of the Treasury (BTr)’s latest report, total revenue collections for the first six (6) months of the year improved by 7.7 percent year-on-year (YoY), which is PHP 132.6 billion higher than the same period in 2022.

Tax revenues contributed 89 percent to the year-to-date (YTD) collections, while 11 percent came from non-tax revenues. For the BIR’s part, YTD collections grew by 7.7 percent or PHP 86.7 billion YoY to PHP 1.2 trillion.

Due to the higher revenue outturn, the National Government (NG)’s cumulative budget gap for the 6-month period dropped to PHP 551.7 billion, which is 18.2 percent lower compared to last year’s shortfall of PHP 674.2 billion.

“Clearly, so much of our economic aspirations depend on the performance of this Bureau. This means the men and women of this Bureau have both tremendous responsibility and privilege at the same time. Hence, transparency and accountability are important,” Secretary Diokno said.

The BIR has continuously engaged in various programs to promote fairness and transparency in the tax system.

Its Run After Tax Evaders (RATE) Program investigates criminal violations of the National Internal Revenue Code of 1997. From July 2022 to May 2023, the BIR has filed 192 complaints with the Department of Justice (DOJ), which have PHP 8 billion in estimated liabilities.

In the same period, the BIR issued 134 closure orders and collected PHP 332.5 million through the Oplan Kandado Program, which suspends the business operations and establishments of non-compliant taxpayers.

The Run After Fake Transactions (RAFT) Program aims to investigate and prosecute buyers, sellers, and Certified Public Accountants (CPAs) that are involved in the use of fake receipts. In March of this year, the BIR filed charges against nine (9) individuals running “ghost corporations” that had cost the government billions in tax losses.

Making the shift to e-governance is a priority of the PBBM administration. In line with this, the BIR has continuously upgraded its Digital Transformation (DX) Program to strengthen and modernize the Bureau, as well as enhance its policies, governance, and standards to elevate taxpayer experience.

Some of the projects under this program include the Online Registration and Update System, Project 230X, Online Tax Clearance, Electronic Invoicing/Receipting and Sales Reporting System, Chatbot REVIE, and the enhanced One-Time Transaction Systems, among others.

“The Department of Finance stands with you as we lay the groundwork for a resilient, modern, and digitally-powered BIR,” Secretary Diokno said in closing.

The BIR is an attached agency of the Department of Finance (DOF) responsible for assessing and collecting all national internal revenue taxes, fees, and charges, as well as enforcing all forfeitures, penalties, and fines connected therewith for the purpose of nation-building and uplifting the lives of Filipinos.