Finance Secretary Carlos Dominguez III said expanding the scope of the Large Taxpayers Service (LTS) of the Bureau of Internal Revenue (BIR) is a key component of the tax administration reforms under the Duterte presidency that will complement the proposed overhaul of outdated tax policies to make the system simpler, fairer and more efficient, especially for the poor plus low- and middle-income taxpayers.

Dominguez said his marching orders to the BIR to accomplish this goal is to “go out and find” the other large taxpayers that have managed to avoid the Bureau’s registry so that it could significantly increase its tax effort, which, for the first nine months of 2016 alone reached P891 billion for the LTS, representing a 9.41 percent improvement over the same period in 2015.

He likewise pointed out that the BIR collected over 15 percent more in January 2017 than what it did in the same period of the previous year.

“Those opposing the tax reform program argue that we should focus on improving the tax effort instead of introducing new revenue measures. There is no argument about improving the efficiency of tax collection. We have, in fact, improved collection dramatically the past few months,” said Dominguez at the tax campaign kick-off ceremony of the LTS.

Dominguez said, “However, we need to convince our legislators that we need to reform our tax policies to further improve collection efficiency. Our taxes should be rendered simpler and fairer to generate the volume of revenues necessary to push our economic program forward.”

The ways and means committee of the House of Representatives is currently discussing several tax reform measures filed in the Congress.

House Bill No. 4774, which was filed by the committee chairperson Rep. Dakila Carlo Cua and endorsed by the Department of Finance (DOF), seeks the lowering of personal income tax rates along with donor and estate taxes, while at the same time, adjusting fuel and automobile excise tax rates and expanding the VAT base but retaining exemptions for seniors and persons with disabilities, among other revenue compensating measures.

Dominguez said that while he finds the performance of the LTS “exemplary,” having accounted for the lion’s share of BIR collections despite being manned by only 564 “highly qualified and dedicated” personnel, more needs to be done to expand the current LTS roster of only 2,320 active large taxpayers.

The LTS has set a collection goal of P1.152 trillion for this year, which is equivalent to 63 percent of the total BIR target of P1.829 trillion for the entire 2017.

“I find the number of registered large taxpayers rather small, considering the rapid expansion of our economy,” Dominguez said.

“If we are able to significantly add to the number of large taxpayers supervised by the LTS, I am sure we can increase the tax effort equally significantly,” he said.

Dominguez said the first task of the LTS is to “seriously review and update the registry of large taxpayers” to enable the Bureau to better meet its collection targets and demonstrate “not only significant but substantial improvements in our tax effort.”

“Many of our large taxpayers are represented in this ceremony. I am almost sure all of them will agree that the number of registered large taxpayers is too small,” said Dominguez.

Dominguez said the Duterte administration is pursuing reforms both in tax policy and administration to raise additional revenues for the government’s unprecedented public investment program focusing on infrastructure, human capital and social protection for the poorest of the poor.

“The additional revenues from these new tax measures is indispensable to building the infrastructure our economy needs to maintain a robust growth rate. It is key to achieving and sustaining the 7 percent GDP (Gross Domestic Product) growth rate we have programmed,” Dominguez said. “This growth rate, in turn, is a necessary condition to bring down the poverty rate to 14 percent by the end of the current administration.”

He said sustaining a growth rate of 7 percent is only achievable if the government raises public spending on infrastructure to at least 5 percent of the GDP.

If this strategy is carried out, Dominguez said the government would be able to accomplish its goal of reducing the rates of extreme poverty from the current 22 percent to 14 percent in 2022.

“We have both a historic and patriotic duty to fulfill. The entire strategy of this government to substantially address our country’s infrastructure backlog and prepare young Filipinos with the skills to be competitive in the coming years will fail if we are not able to raise the revenues required to do the basic things,” Dominguez said.

“We, whose responsibility is to produce the revenue stream to fund this strategy, play a key role in our people’s economic success. I trust we will all deliver and deliver well,” he added.