By Lawrence Agcaoili

The Philippines failed to achieve its programmed tax effort last year as the impact of the global economic meltdown took its toll on the collections of the Bureau of Internal Revenue and the Bureau of Customs.

Finance Secretary Margarito Teves said the government?s tax effort reached 14 percent of gross domestic product last year, slightly lower than the revised assumption of 14.4 percent of GDP and the original target of 15.2 percent of GDP.

Tax effort refers to the ratio between tax collections and the domestic economy as measured by the GDP.

The government originally expected the tax effort to improve to 15.2 percent of GDP with tax revenues amounting to P1.108 trillion last year from 14 percent of GDP when the government raised P932 billion in 2007.

However, the programmed tax effort was later reduced to 14.4 percent of GDP as the government expected revenues to reach only P1.093 trillion due to the global economic crisis.

Taxes collected by the national government amounted only to P1.049 trillion last year, or P44 billion short of the revised target and P59 billion lower than the original target. Nominal GDP reached P7.497 trillion instead of the target of P7.592 trillion.

The government?s tax effort fell steadily from a high of 17 percent of GDP in 1997 to 12.4 percent of GDP in 2004 and recovered until it increased to 14.3 percent of GDP in 2006 before slipping to 14 percent in 2007 and 2008.

Data showed that the tax effort of the BIR slipped to 10.4 percent of GDP as the agency collected P778.6 billion, or P31.4 billion lower than the revised target of P810 billion and P66.4 billion short of the original target of P845 billion.