Revenue effort falls in Q1 as gov’t blames shift to quarterly VAT
REVENUE EFFORT — a measure of the government’s efficiency in raising revenue — fell to 14.6% of gross domestic product (GDP) in the first quarter, behind the year-earlier rate of 15.9%, the Department of Finance said.
“If we compare it to the first quarter of last year, it’s slightly lower. But what we should consider is there’s a change in the disbursement; the collection of value-added tax (VAT) is now quarterly,” Finance Undersecretary Zeno Ronald R. Abenoja told reporters on Friday.
Tax effort — which isolates revenue collected in the form of tax — was 12.8% of GDP in the first quarter, against 14.2% a year earlier.
The Bureau of Internal Revenue’s (BIR) revenue effort was 9% of GDP in the first quarter, down from 10.2% a year earlier.
The Bureau of Customs’ (BoC) revenue effort stood at 3.8%, unchanged from a year earlier.
Non-tax effort was 1.8% of GDP, also unchanged.
Finance Secretary Benjamin E. Diokno said the revenue ratios are “not comparable” to 2022’s when VAT collection was still monthly.
“We have to look at April numbers. So far, when we look at advanced numbers for April, it will show the collection has actually improved relative to last year,” Mr. Abenoja added.
The BIR said it collected P837.92 billion in the first four months of the year, exceeding its target for the period by 1.3%.
Customs reported that it surpassed its target by 6.29% for the four months to April, collecting P265.22 billion.
The National Government’s deficit-to-GDP ratio was 4.84% at the end of March, lower than the 6.41% from a year earlier and the 7.33% seen over the full year in 2022. — Luisa Maria Jacinta C. Jocson