Pardo chided for reducing revenue target

Two congressmen chided newly installed Finance Secretary Jose Pardo for choosing to reduce his revenue target instead of improving tax collection.

"The new finance team ascended to power on the premise and the promise that they can raise revenues. And what did they do first? Downscale the revenue target. What a very auspicious start!" said Rep. Ralph Recto (LAMP, Batangas).

For his part, Rep. Prospero Pichay Jr. (Lakas, Surigao del Sur) said Pardo should forget about new taxes.

"He should instead focus on improving tax collection," he said.

He cited World Bank studies showing that the country's tax collection effort is a mere 30 percent of what can possibly be collected.

"Improving collection efficiency to 40 percent can boost tax revenues by P100 billion, eliminating the need for new taxes which will be borne mainly by low-income groups," said Pichay.

Pardo told the House-Senate conference committee on the budget the other day that he, Internal Revenue Commissioner Dakila Fonacier and Customs Commissioner Ramon Farolan have decided to reduce the revenue targets for the Bureau of Internal Revenue and the Bureau of Customs.

For the BIR, the collection goal was cut from P413 billion to P398 billion, while that for Customs was reduced from P100 billion to P92 billion.

Recto said while the new BIR target represents an increase of 16.5 percent over last year's actual collections, the expected improvement is still below the 18 percent average increase in tax collection from 1993 to 1997.

He said the Customs' goal also includes an increase that is below the 1993-1997 average.

He stressed that instead of setting a lower goal, Pardo and his team should work on improving tax collection and going after tax evaders.

Recto also reiterated his proposal for the government to increase its spending and disregard the recommendation of the International Monetary Fund for it to maintain a P62.5 billion budget deficit this year.

"The deficit target this year has been presented as sacrosanct that any proposal to raise it is dismissed as fiscal management sacrilege," he said.

He said the budget gap for last year was originally projected at P17 billion but jumped five-fold to P113 billion despite single-digit inflation and low interest rates.

"I say that we bite the deficit bullet. We can stretch the P62.5 billion deficit to P90 billion without inflicting damage to our economy. Sticking with the original deficit target will be more injurious to our government," he said.