Sans new taxes, government eyes higher revenues until 2028
Credit to Author: Louise Maureen Simeon| Date: Sat, 29 Jun 2024 00:00:00 +0800
MANILA, Philippines — The economic team is still shooting for higher revenues starting next year until the end of the Marcos administration even as it remains firm on not imposing tax measures that could be inflationary and burdensome to Filipino consumers.
During the 188th Cabinet-level Development Budget AZrecalibrated its targets as part of fiscal consolidation.
In particular, the DBCC hiked the revenue goals for 2025 until 2028 on expectations of an average 10 percent expansion on collections every year.
For 2025, revenues are seen growing 8.7 percent to P4.64 trillion from this year’s P4.27-trillion assumption.This will further jump to P5.06 trillion in 2026 and P5.63 trillion in 2027.
By the end of the Marcos administration in 2028, revenues are expected to have grown to P6.25 trillion, equivalent to 16.9 percent of gross domestic product.
Revenue assumptions for 2025 to 2028 were jacked up from the earlier target set in April.
Finance Undersecretary Domini Velasquez said the higher revenue target is largely due to the double-digit increases in the collections of both the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC).
“We are doing a lot of tax efficiency improvements in both the BIR and the BOC, including digitalization, regulations to capture e-commerce transactions and also modernization,” the chief economist said.
The DOF maintained that it has fine-tuned its priority revenue reforms to take into consideration the present economic situation such as elevated inflation.
This is aimed at ensuring that its proposals do not result in unintended consequences that may further affect inflation and overall growth.
“We don’t have any new tax measures that are inflationary. We do have tax measures in Congress and this should add around P42 billion annually,” Velasquez said.
These include the remaining package four of the tax reform program, excise tax on pick up trucks, value added tax on digital service providers, excise tax on single-use plastics, mining fiscal regime and the motor vehicle road user’s tax.
“For those legislative reforms that were passed in the House [of Representatives] and in advance stages in the Senate, we are very hopeful that these will be passed this year,” Velasquez said.
The DOF said it will also continue to tap into non-tax revenues to generate additional funds and ensure sustainable funding.
All revenue efforts are expected to support the government’s expenditure priorities.
“This gives us room to actually spend for growth enhancing measures and reach our growth targets for the medium term,” Velasquez said.
“Having the fiscal space allows the government to spend more on priority measures such as social services and infrastructure,” she said.