Philippines lowers 2009 BIR revenue goal by 5.5 pct

MANILA, Nov 6 (Reuters) - The Philippines has cut by 5.5 percent the 2009 collection goal of its key tax revenue agency following a new law that allows minimum wage earners to avoid paying income tax, officials said on Thursday.

An expected delay in the passage of new tax measures would also dampen revenue collection at the Bureau of Internal Revenue (BIR), which accounts for two-thirds of total state tax collection.

The BIR has lowered its 2009 revenue target to 915 billion pesos ($19 billion) against an original plan of 968.3 billion pesos, said Sixto Esquivias, the new BIR chief.

The agency said in September it would likely miss its revenue goal this year partly due to the law passed earlier this year that allowed minimum wage earners not to pay income taxes.

Latest data showed the BIR would collect only 810 billion pesos this year, about 4 percent lower than its revenue target of 845.2 billion pesos, Esquivias said.

The Bureau of Customs said it expects to hit its target of 269 billion pesos this year.

Manila expanded a sales tax law more than two years ago to rein in a ballooning budget deficit but it has had little success in curbing widespread tax evasion, smuggling, and corruption.

The government has resorted to selling state assets to offset weak revenues.

It plans to sell a 40 percent stake in oil refiner Petron Corp before the end of the year to keep its budget deficit within the target of 75 billion pesos, or 1 percent of gross domestic product, this year.

($1 = 48.15 pesos)

(Reporting by Rosemarie Francisco; Editing by Neil Fullick) Keywords: PHILIPPINES ECONOMY/REVENUE

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