DBCC tasks BIR, Customs to raise 13 trillion in 2019 to fund infra program

The inter-agency Development Budget Coordination Committee (DBCC) expects the collections of the government’s two main tax agencies would breach the R3-trillion mark next year to support the country’s ambitious infrastructure plan.

During the DBCC’s recent meeting, President Rodrigo R. Duterte’s economic team raised the collection target for the Bureau of Internal Revenue (BIR) in 2019, while maintaining the goal previously set for the Bureau of Customs.

Data from the DBCC obtained by Manila Bulletin showed, the BIR and the Customs bureau are expected to raise a record R3.007 trillion next year, slightly higher by 1.2 percent compared with the previously approved target of R2.971 trillion.

The DBCC, composed of the Departments of Finance, of Budget and Management as well as the National Economic and Development Authority, also revised upward its projected tax revenues for 2018 by 1.3 percent from R2.620 trillion to R2.654 trillion.

The higher than expected tax revenues this year is mainly due to the BIR, which is expected to bring in an above target collection.

The DBCC expects the BIR collect R2.073 trillion this year, higher than 1.6 percent compared with the agency’s target of R2.039 trillion.

In 2019, the economic managers tasked the BIR to raise R2.345 trillion, higher by 13 percent against the emerging revenue take this year and by 15 percent compared with the agency’s original collection goal.

For the Customs bureau, the DBCC is maintaining the agency’s collection program this year at R581.3 billion, while at R662.2 billion in 2019.

As of May this year, the BIR collection stood at R827.73 billion, while the Customs bureau already raised R229.34 billion.

Last week, the DBCC raised its deficit spending ceiling next year to support the government’s infrastructure program from 3.0 percent to 3.2 percent of the economy, as measured by the country’s Gross Domestic Product (GDP).

Finance Secretary Carlos G. Dominguez III said the two percentage point increase in deficit ceiling is aimed at maintaining the government’s “aggressive" spending strategy.

“That will sustain the momentum of the ‘Build, Build, Build’ program,” Dominguez said. “We assure our people that the government remains committed to fiscal discipline even as it pursue a high level of productive spending that will clear the way to high — and inclusive — growth.”

The increase in deficit-toGDP ratio also raised the government’s nominal fiscal gap by 8.0 percent to R624.37 billion from the previous assumption of R579.23 billion.

Dominguez, however, explained that the rise in deficit spending will not impact the government’s current investment grade credit rating status.

For 2019, the government programmed its disbursements to hit R3.833 trillion, equivalent to 19.8 percent of GDP and higher by 16 percent compared with R3.369 trillion this year. The administration raised its deficit spending ceiling next year to support the government’s ambitious infrastructure program, the inter-agency Development Budget Coordination Committee (DBCC) said. Following the meeting of President Rodrigo R. Duterte’s economic managers yesterday, the DBCC raised its budget deficit program for 2019 from 3.0 percent to 3.2 percent of the economy, as measured by the country’s GDP. Finance Secretary Carlos G. Dominguez III said the two percentage point increase in deficit ceiling is aimed at maintaining the government’s “aggressive” spending strategy.