IT IS indeed crucial for the Bureau of Customs to pursue its modernization program considering it is a primary revenue tool that the government relies on to support its agenda for growth.
Other than its vital role to improve revenue collection to backstop the Duterte administration's ambitious inclusive growth agenda, the agency also needs to fully modernize its systems and processes to better facilitate trade, fight smuggling and bar the entry of illegal drugs and terrorists from the country's borders.
Finance Secretary Carlos Dominguez III was right when he said there is a need for BOC "to transform itself into a truly modern bureaucratic organization."
The Duterte administration is bent on fulfilling its major thrust to achieve inclusive growth that is anchored on massive public investments in infrastructure, human capital, and social protection for the poor and other vulnerable sectors.
Definitely, this public investments need ambitious spending that requires immense revenue inflows on top of the official development assistance that the government expects to get from other countries in the medium term.
"The role of the Bureau of Customs is more than just improving revenue collection to provide government the wherewithal to fund public investments. We expect the agency to continuously improve its procedures and processes to facilitate trade. This is important in building an investments-led growth that will produce employment opportunities for our people," according to Dominguez.
Agencies engaged in revenue collection like the BOC and the Bureau of Internal Revenue do not actually collect for the government, but "for the people of the Philippines," with the State only allocating how the taxes and duties they collect will be spent.
The BOC reported that it collected P104.9 billion in taxes in the first quarter of 2017, exceeding the P104.28 billion target for the period. It expects to collect P468 billion this year, up from the 2016 level of P396.37 billion.
With a modernized system that will further improve collection, the BOC is expected not only to help raise revenues and facilitate trade but to likewise protect Filipinos from the entry of illegal drugs, substandard products and other harmful commodities.
"The Bureau occupies a primary place in our border security. Porous borders are the delight of all sorts of menacing elements: smugglers, drug traffickers, gunrunners, terrorists and the like," Dominguez said.
Smuggling, besides denying the government the potential revenues it deserves, also leaves the country open to the flow of illegal drugs and makes our borders defenseless against terrorists.
The Duterte administration is bent to transform the country into a high middle-income one by 2022 and to a high-income economy in one generation or by 2040.
On top of improving revenue collection, the approval of the first package of the Comprehensive Tax Reform Program (CTRP) is crucial to the financial viability of the Duterte administration's higher public spending policy because it aims to correct the tax system's "inherent flaws, such as non-indexation to inflation of the tax rates and the large scope of exemptions and special treatments that complicates tax administration."
House Bill No. 5636, the CTRP's first package also known as the Tax Reform for Acceleration and Inclusion Act (Train) aims to lower personal income taxes for compensation earners along with expanding the tax base by limiting VAT exemptions to raw food, education and health and those enjoyed by seniors and persons with disabilities; adjusting the excise tax rates for fuel and automobiles; and taxing sugar-sweetened beverages (SSBs), among other measures.
The House of Representatives approved the CTRP's first package -- HB 5636 -- by a 246-9 vote with one abstention last May 31 before the Congress adjourned.
nelson_bagaforo@yahoo.com
