Economic managers expect gov’t to surpass 2023 revenue target

The economic managers of the Marcos administration are expecting the government revenue collections this year to exceed target amid measures to improve tax administration and collection efficiency.

In a statement following a special coordination committee meeting on Friday, the Development Budget Coordination Committee (DBCC) said the “emerging total revenue collection for 2023 is estimated to be P3.84 trillion to P3.90 trillion.”

The projected revenue collection for the entire year is above the P3.73-trillion target set earlier by the DBCC.

In April, the economic managers set the revenue goal at P3.73 trillion this year, P4.184 trillion in 2024, P4.692 trillion in 2025, P5.255 trillion in 2026, P5.895 trillion in 2027, and P6.621 trillion in 2028.

The DBCC, chaired by the Budget chief, is composed of the secretaries of National Economic and Development Authority (NEDA), Finance (DOF), as well as the governor of the Bangko Sentral ng Pilipinas (BSP).

The DBCC, likewise, is expecting tax revenues to clock in at P3.50 trillion to P3.55 trillion, surpassing the target by about 15%.

The above-target revenue project resulted from the higher actual collections in the first nine months of 2023, which reached P2.84 trillion, up 6.8% year-on-year and exceeding the target for the period by 3%.

This, as both tax and non-tax revenues registered positive growth at 6.4% and 10.5%, respectively, “owing to the higher collections from the Bureau of Customs (BOC) and non-tax revenues of P152.57 billion.”

The DBCC said the Bureau of Internal Revenue (BIR) and the BOC are implementing several reforms to strengthen tax administration and enhance revenue collection, which include digitalization programs intended to eliminate corruption, increase transparency, and improve the ease of paying taxes.

Tax reform measures

Moreover, the economic managers said they will work closely with Congress for the passage of the previous administration’s remaining tax reforms on passive income and financial intermediaries taxation and real property valuation and assessment, as well as new tax measures.

“These include the excise tax on single-use plastics (SUPs), rationalization of the mining fiscal regime, motor-vehicle road users’ tax, excise tax on sweetened beverages and junk foods, tax on pre-mixed alcohol, value-added tax (VAT) on digital service providers, carbon taxation, capital market development bill, and the military and uniformed personnel (MUP) pension reform bill,” the DBCC said.

Meanwhile, the national government’s disbursement accelerated significantly from 93.4% of the program as of June 2023 to 98.9% as of September.

“This was mainly driven by the robust disbursement in the third quarter, reaching P3.82 trillion as of the end of September,” the economic managers said.

Catch-up plans

The DBCC added that the “successful submission of agencies’ catch-up plans, government spending is expected to further improve during the fourth quarter.”

“This will be mainly driven by accelerated implementation of programs on infrastructure, transport, labor and employment, social protection, and education, among others,” the economic managers said.

The DBCC said the Department of Budget and Management (DBM) shall continue its close coordination with agencies, especially those with low budget utilization rates, through regular meetings focusing on their spending performance and catch-up plans.

“Moving forward, the DBCC shall address procurement bottlenecks by strictly directing the conduct of Early Procurement Activities (EPA) among government agencies by next year,” it said.

“This shall enable timely procurement planning by having procurement activities already conducted as early as the submission of the National Expenditure Program (NEP) to Congress,” it added.

BTMS

The DBCC said the Budget and Treasury Management System (BTMS), an integral part of the Integrated Financial Management Information System (IFMIS), will be implemented by 2024.

“This shall address major procurement bottlenecks such as the late submission of billings from suppliers and creditors and delays in the delivery of goods and services by providers within the time frame,” it said.

The DBCC said it will encourage all government agencies including State Universities and Colleges (SUCs), Government-Owned and Controlled Corporations (GOCCs), and Local Government Units (LGUs) to utilize safe and efficient digital payments for goods and services, including the distribution of financial assistance, pursuant to Executive Order No. 170, s. 2022.

“Given the better-than-expected revenue and spending performance, the DBCC maintains optimism in its outlook that growth and fiscal targets set under the Medium-Term Fiscal Program can be achieved,” the economic managers said.—AOL, GMA Integrated News