DOF: 2017 tax effort highest in 10 years without new legislation

REVENUE from tax collections of P2.251 trillion in 2017, which is 14.25 percent as a percentage of gross domestic product (GDP), represents the highest tax effort in 10 years without any new legislation introduced to prop up collections, according to the Department of Finance (DOF).

Finance Undersecretary Gil Beltran said tax effort in the first quarter of 2017 was at 13.4 percent, which increased to 14.9 percent in the second quarter and further rose to 15 percent in the third quarter. For the entire 2017, the tax effort reached 14.25 percent, an increase from the previous year’s 13.75 percent, he said.

In 2007, the government’s tax effort was reported at 13.5 percent as a percentage of GDP, which rose slightly to 13.6 percent in 2008, according to a report presented by Beltran to Finance Secretary Carlos Dominguez at a recent DOF Executive Committee (Execom) meeting.

The tax effort dipped to 12.2 and 12.1 percent respectively in 2009 and 2010. It reached 12.4 percent in 2011, and increased to 12.9 percent in 2012. With the implementation of Republic Act 10351 or the law increasing excise taxes on sin products such as cigarettes and alcohol, the tax effort rose steadily to 13.3 percent in 2013, 13.6 percent in 2014 and 2015 and 13.7 percent in 2016, said Beltran, who is the DOF’s chief economist.

“(The tax effort for 2017) is the highest tax effort increase over a period of 10 years,” said Beltran during the Execom meeting. “This is without any new tax measure but purely from tax administration.” Dominguez noted that besides registering the highest tax effort increase in 10 years, the DOF was also able to collect the highest dividends ever from government-owned and –controlled corporations (GOCCs) in 2017.

A separate report earlier submitted to Dominguez by the DOF’s Corporate Affairs Group led by Undersecretary Antonette Tionko showed that dividends remitted by GOCCs to the National Treasury in 2017 amounted to an all-time high of P36.45 billion, representing a nearly 30 percent increase from the previous year’s collections of P27.73 billion.

Dominguez noted that even if the Land Bank of the Philippines was not required to contribute dividends on its net earnings in 2017, remittances would reach P30.45 billion, still a remarkable improvement over the 2016 figures. (PR)
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