To further shore up revenue while reducing the burden on income earners, more reforms will be implemented at the Department of Finance (DOF) and its attached agencies to ensure that tax cheats will pay while fiscal incentives will go only to sectors that need and deserve them.
In a statement, Finance Secretary Carlos G. Dominguez III also announced the designation of Finance Undersecretary Gil S. Beltran the department’s “anti-red tape czar,” similar to what all other government agencies would put in place under the Duterte administration.
The role of Beltran, currently the DOF’s chief economist, “will be to dramatically reduce the number of steps and documentary requirements in transacting business with the DOF and all attached bureaus.”
“These include paying taxes, getting tax refunds, acquiring tax exemption certificates, getting imports released, shipping out exports, registering business and getting appointments with public officials,” Dominguez said of Beltran’s role.
According to Dominguez, the Duterte administration was catapulted to power by the majority of Filipinos who wanted “overwhelmingly to cut the tax rates.”
“The high tax rate system we maintained was counter-productive. We collected less taxes the longer the regime was maintained. No amount of public shaming could reverse this. The higher the tax barrier, the more conducive it becomes to evade tax due,” Dominguez said.
In this regard, he said the DOF was “studying ways we can improve the organizational capacity of our two major revenue agencies.”
“Among the measures being studied are exemptions from the salary standardization law, increased fiscal autonomy, relaxing strict bank secrecy laws and making tax evasion a predicate crime to money laundering,” he said.
“Much more effort will have to be exerted toward making tax payment a truly satisfying and simplified experience. We will have to make tax payments more accessible in theory and in practice,” Dominguez said.
“Also, we are as committed as ever to improving enforcement,” Dominguez added. “The directions from the President are clear: we will have zero tolerance for corruption.”
He said the DOF would accelerate its anti-corruption programs, namely the Run After Tax Evaders (RATE), Run After the Smugglers (RATS), as well as Revenue Integrity Protection Service (RIPS).
“We will work closely with the Department of Justice to speed up resolution of 635 pending tax and smuggling cases, amounting to P103 billion in collectibles. It will be a sad commentary on our state of affairs if RATE and RATS have resulted in only five convictions for tax evasion and two convictions for smuggling,” Dominguez said.
He also said the Duterte administration was “committed to rationalizing tax incentives.”
“Government provides at least P144 billion in income tax perks and tax holidays. A truly serious study needs to be done about the relevance of many of those tax perks,” he said.