Shortfall sources tagged by tax, customs bureaus

BY JUDY T. GULANE, BusinessWorld Senior Reporter LESS THAN HALF the Customs bureau’s collection districts and the tax bureau’s revenue regions managed to exceed collection goals for the better part of the year, a result that was not surprising given both agencies’ large shortfalls. Napoleon L. Morales, Bureau of Customs commissioner, reported to the House ways and means committee last week that only five of the bureau’s 15 collection districts exceeded their goals as of August. The five were the Ninoy Aquino International Airport, Legaspi, Cebu, Cagayan de Oro and Davao. Short of target were San Fernando, Port of Manila, Manila International Container Port, Batangas, Iloilo, Tacloban, Surigao, Zamboanga, Subic and Clark. Referring to the Port of Manila, Manila International Container Port and Batangas, Mr. Morales told the committee that "the total shortfall of the three major ports accounted for P10.4 billion of our P12-billion shortfall for the period." Although the Port of Manila managed to collect P43 billion in the eight months to August, it was still short by P4.5 billion. Batangas collected P27.8 billion but was still short by P4.2 billion, while the Manila International Container Port lacked P1.7 billion to hit its P35.4-billion goal. Of the 10 districts that fell short of target, only the Manila International Container Port was in deficit by less than 7.5%. The collection gaps among the nine remaining districts ranged from 9% to 56%. The Finance department placed the Customs bureau’s shortfall as of August at P12.1 billion, with Finance Undersecretary Gil S. Beltran explaining that the it was due to low import volumes. Customs and tax personnel are covered by Republic Act 9335 or the Attrition Act of 2005, which states that those who fall short of target by 7.5% will be removed from service. Tax bureau data as of July, meanwhile, showed that only eight out of 19 revenue regions exceeded their collection targets: Makati, San Fernando, Tuguegarao, Legazpi City, Tacloban City, Cagayan de Oro City, and Butuan City. The Large Taxpayers Service fell short, as well as the Quezon City, San Pablo City, Valenzuela, Calasiao, Cordillera Administrative Region-Baguio City, Iloilo City, Bacolod City, Cebu City, Zamboanga City, Cotabato City, and Davao City revenue regions. Two — Valenzuela and Bacolod City — incurred shortfalls higher than the 7.5% threshold. The Finance department placed the tax bureau’s shortfall at P40.4 billion as of August, which Mr. Beltran attributed to low interest rates and "unrealized tax administration improvements" during the time of former tax chief Jose Mario C. Buñag.