RUNNING after tax evadors and
smugglers cannot alone improve revenue receipts in a couple of years. Tax
administrations should back such initiatives with efforts that expedite
prosecutions, apart from drawing prioritizing initiatives.
This is the
message of Asian Development Bank’s (ADB’s) report on completion of its
technical assistance (TA) project for the Philippines released last
week.
The project captioned ‘Enhancing Revenue Collection and
Strengthening the Criminal Prosecution of Tax Evasion Cases’ was launched in May
2008 and completed in March 2011.
The project had two components: 1) Tax
revenue enhancement that was supported the government’s agenda to implement
sustainable revenue enhancing measure and broad tax policy and administration
reforms covering technical papers on excise tax, tax performance benchmarking of
selected sectors and review of Bureau of Internal Revenue (BIR) receipts
forecasting operations. 2) Strengthening criminal prosecution of tax
evasion.
TA’s objective was to facilitate enhanced tax revenue collection
in the order of 0.25% of GDP in 2008 and 0.4% of GDP in 2009. The intended
outcome of the TA was improved tax policy and strengthened criminal prosecution
of tax evasion.
As put by the report, “Overall, the TA is considered
partly successful. At the impact level, the global financial crisis prevented
achievement of the tax revenue to GDP targets. Moreover, there is no significant
shift in the trends in tax revenue collection from 2009 to 2011 to suggest that
reforms have significantly improved efficiency in tax collections. Assessment of
the activities designed to institutionalize the ‘Run-after-tax-evaders’ (RATE)
program at the BIR requires a longer period than 2009 to 2011 as it does take
time for sustained efforts to change tax payer behavior. At the output level,
assignments were satisfactorily completed. Case management and tracking have
reportedly improved at National Prospection Service (NPS).”
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