The emerging revenue effort of 15.6 percent over the five-year period since the Duterte administration took over in 2016 is the highest in over two decades, according to data from the Department of Finance (DOF).
A report to Finance Secretary Carlos Dominguez III by the DOF’s Domestic Finance Group (DFG) showed that this feat was achieved despite the global economic downturn spanning almost two years now because of the COVID-19 pandemic.
Assistant Secretary Valery Brion of the DFG said during a recent DOF Executive Committee (Execom) meeting that without the pandemic, the revenue effort of the administration of President Rodrigo Duterte between 2017 and 2021 would have reached an estimated 16.2 percent.
Brion said DOF-DFG estimates placed tax revenue losses resulting from the pandemic at P785.6 billion in 2020 and P929.9 billion in 2021.
Under the administration of then President Joseph Estrada (1999 to 2000), the average tax effort was 14.1 percent, which fell to 14.0 percent under then-President Gloria Arroyo (2001 to 2010), before rising slightly to 14.3 percent on the watch of the late President Benigno Aquino III (2011-2016).
In terms of tax effort, the Duterte administration’s emerging average is 14 percent from 2017 to 2021. Without the pandemic, the government under President Duterte would have reached an even higher average tax effort of 14.8 percent.
The tax effort average under the Estrada administration was 12.7 percent, which fell to 12.1 percent on the Arroyo watch and went up to 12.7 percent during the Aquino III presidency.
Tax effort pertains to the share of tax collections to the gross domestic product (GDP), while revenue effort covers the share of tax revenues, non-tax revenues, and other revenues of government agencies in relation to the GDP. The measures are used to determine how effective the government is in collecting revenues to fund its priorities.