DOF expects slowdown in government revenue effort next year

The Department of Finance (DOF) expects the government’s revenue effort to slow down next year because of lower non-tax revenues from privatization.

The DOF expects the total revenues as a percentage of gross domestic product (GDP) to hit only 16 percent next year, from the estimated 16.3 percent this year.

In 2007, the revenue effort was 17.1 percent, data from the DOF showed.

The DOF is targeting to collect P1.393 trillion in revenues, thus attaining a revenue effort of 16 percent in 2009.

“This is lower than our projection of 16.3 percent for 2008 due to lower non-tax revenues,” the DOF said.

Of the targeted revenues of P1.393 trillion, the government will mobilize a total of P1.313 trillion from the Bureau of Internal Revenue, the Bureau of Customs and the Bureau of the Treasury.

The DOF said these would altogether account for 94.3 percent of total revenues.

“Privatization proceeds from the sale of Food Terminal Inc. (FTI) and the lease of Fujimi will account for P10 billion or 0.7 percent of non-tax revenues,” the DOF said.

FTI, an agro-industrial commercial estate in Taguig, was originally built to be a food processing and consolidation center for agricultural products. It houses more than 300 small-to-medium scale companies engaged in different industries such as manufacturing, garments and electronics.

The government has decided to defer the sale of FTI to 2009 instead of this year due to uncertain market conditions.

The government’s Fujimi project, meanwhile, is a real estate property in Fujimi Cho, Chiyoda Ku, Japan.

The DOF has set a target of P30 billion from privatization for 2008 or one third of the P90.6 billion generated last year.

The government has been stepping up efforts to boost state coffers but the privatization of state-owned assets has become the major source of revenues amid shortfalls in tax collections.