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PH tax effort reaches a 10-year high of 14.25% of GDP

Tax collections in 2017 reached a 10-year high without the introduction of new laws, an official of the Finance Department said Tuesday.

“[The tax effort for 2017] is the highest tax effort increase over a period of ten years. This is without any new tax measure but purely from tax administration,” Finance Undersecretary Gil Beltran said.

The agency said tax collection amounted to P2.251 trillion in 2017, representing 14.25 percent of the gross domestic product, the highest tax effort in 10 years.

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

Beltran said in a report to Finance Secretary Carlos Dominguez that the government’s tax effort was only 13.5 percent of GDP in 2007, which rose slightly to 13.6 percent in 2008.

Tax effort dipped to 12.2 percent in 2009 and 12.1 in 2010. It improved to 12.4 percent in 2011 and 12.9 percent in 2012.

Beltran said 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.

Dominguez said besides registering the highest tax effort in 10 years, the Finance Department was also able to collect the highest dividends  from government-owned and –controlled corporations 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 a record P36.45 billion, representing a nearly 30 percent increase from the previous year’s collections of P27.73 billion. 

Dominguez said that even if state-owned 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. 

LandBank was allowed to do away with its dividend contributions to the national government in 2017 to give the bank sufficient leverage in its capital position to better serve the increasing developmental needs of the country. 

LandBank, with P6.6 billion in remittances to the national government in 2016, was the biggest dividend contributor among GOCCs.

Data showed that in 2017, even without LandBank, dividend collections from GOCCs increased by 9.8 percent, which Dominguez said was due to DoF’s efforts to aggressively promote financial discipline among GOCCs.  

He said with LandBank’s dividends included in the computations, total GOCC remittances would be P36.45 billion, or a 29.8-percent hike from the 2016 collections. 

Tionko said dividend collections totaling P30.45 billion last year came from 53 GOCCs, including the Civil Aviation Authority of the Philippines, which had not remitted dividends for the past four years, but now emerged as one of the biggest dividend contributors.  

CAAP, which remitted a total of P5.39 billion to the Treasury, was able to collect nearly P6 billion from Philippine Airlines in October 2017, after President Rodrigo Duterte ordered the Department of Transportation not to extend the deadline it had given to the flag carrier to pay its long-overdue navigational fees and other charges. 

Besides CAAP, among the other biggest dividend contributors were the Philippine Deposit Insurance Corp. with P7.46 billion; Development Bank of the Philippines, P2.51 billion; Manila International Airport Authority, P2.22 billion; Philippine Ports Authority, P1.95 billion; Bangko Sentral ng Pilipinas, P1.84 billion; National Power Corp., P1.39 billion; Philippine Amusement and Gaming Corp., P1.18 billion; and Subic Bay Metropolitan Authority, P923.60 million. 

Topics: Tax collection , highest tax effort increase , Gil Beltran , Republic Act 10351
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