Bumper harvest of taxes
The initial phase of the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Act seems to have started at the right footing.
The Bureau of the Treasury has reported that for the month of January, the national government posted a P10.2-billion budget surplus which was 359-percent bigger than the surplus for the same month last year.
The country’s two major revenue producers, the Bureau of Internal Revenue and Bureau of Customs, collected in January P175.6 billion and P40.8 billion, respectively.
The revenue growth is attributable to the increased and new taxes imposed by TRAIN on oil, cigarettes and other products to offset the reduction in personal income tax.
The bumper revenue harvest augurs well for the administration as it prepares for the second round of proposed tax measures which involves, among others, the rationalization of the grant of tax holidays and other financial perks to various industries.
If the revenue generation plans live up to their projected favorable results, there is reason to be optimistic about the administration’s ability to deliver on its ambitious P8.3-trillion “Build, Build, Build” infrastructure program and poverty alleviation projects.
In the ordinary household, the unexpected receipt of extra cash often gives rise to the temptation to spend it and fast.
For some families, there is no guilt feeling about splurging on some luxuries or enjoying things that are otherwise out of reach due to lack of funds when, for example, the breadwinner receives a hefty bonus from his employer or a family member wins in a lottery. The manna from heaven is supposed to be partaken of with gusto as soon as possible.
Without passing upon the morality of the “one-day millionaire” syndrome, it cannot be discounted that a similar attitude may find its way to the people in government who, directly or indirectly, exercise some degree of control over the country’s coffers.
Like honey that attracts bees, expect the huge budget surplus to draw (salivating) attention and interest from some government officials and members of Congress for various reasons.
With the availability of funds, some officials, especially those who have political ambitions, may be motivated into embarking in publicity-rich projects whose strategic value or benefits are, however, marginal.
Drawing from past experience in similar situations, the biggest area of concern would be the members of Congress who, in a false sense of entitlement, may get the impression that the surplus funds justify demands for additional pork barrel allocations for their pet projects or favored contractors and suppliers.
Although pork barrels have supposedly been abolished in compliance with a Supreme Court decision that declared them as unconstitutional, they remain part of the national budget through ingenious forms and shapes, no thanks to our crafty lawmakers.
Fending off their desire to get a bigger share of the country’s expanded financial pie is not going to be easy for the officials who hold the key to the national coffers.
Finance Secretary Carlos Dominguez III and Budget Secretary Benjamin Diokno will need a lot of political will and support from President Duterte in preventing the lawmakers from dipping their fingers into the surplus funds.
The pressure to be less conservative in the disposition of public funds would come in the guise of privileged speeches, congressional investigations, smear campaigns and disparaging statements during budgetary hearings.
With the 2019 national and local elections just around the corner, the two top financial officials of the administration should brace for persistent demands from the lawmakers to “share” with them the benefits of the surplus funds. It would be interesting to see how the two officials would respond to that challenge.
A test of wills over the people’s money is in the offing.
