Pass more tax bills to raise P120.5B more in ’24, legislators urged
MANILA -Achieving the Marcos administration’s economic goals depends on proposed laws that Congress must pass, including the remaining tax reform packages of the Duterte administration, according to Finance Secretary Benjamin Diokno.
Based on the present administration’s fiscal program, revenues are expected to hit P3.73 trillion in 2023 and improve to P6.62 trillion in 2028.
This is based on the assumption that new tax revenue measures such as the Package 4 or the Passive Income and Financial Intermediary Taxation Act, value-added tax on digital service providers and excise taxes on single-use plastics and premixed alcohol are implemented starting 2024.
Also, the economic managers are pushing for additional reform measures such as excise tax on sweetened beverages and junk foods, motor vehicle road user’s tax, mining fiscal regime, carbon taxation, capital market development bill and the military and uniformed personnel pension reform bill.
“These [proposed] tax revenue measures will enable us to raise additional revenues totaling P120.5 billion or 0.5 percent of GDP (gross domestic product) in 2024,” Diokno said.
“These will further increase to P152.2 billion or equivalent to 0.5 percent of GDP in 2025 with the enactment of the motor vehicles road user’s tax and further to P183.2 billion pesos or 0.6 percent of GDP in 2026,” said Diokno during his presentation before the Senate Committee on Finance, chaired by Senator Juan Edgardo “Sonny” Angara.
The Medium Term Fiscal Framework serves as the government’s blueprint to bring down the country’s debt-to-GDP ratio from 60.9 percent in 2022 to less than 60 percent by 2025; cut the deficit-to-GDP ratio to 3 percent by 2028, and maintain infrastructure spending at 5 to 6 percent of GDP.
“While we await the passage into law of the proposed tax reforms, the DOF and its collecting bureaus are aggressively implementing reforms to strengthen tax administration in order to achieve Medium-Term Fiscal Framework targets,” Diokno said.
On the other hand, disbursements from 2023 to 2028 are expected to be sustained above 20 percent of GDP, to reach P5.23 trillion in 2023 and P7.77 trillion in 2028.
Considering these revenue and disbursement projections, the fiscal deficit- or spending beyond revenues —is expected to progressively decline from 6.1 percent of GDP in 2023 to 3 percent of GDP in 2028.As of the first semester this year, the national government spent P551.7 billion—shrinking by 18.2 percent from P674.2 billion in the same period last year.
A contraction in government spending was partly blamed for a slower-than-expected GDP growth rate of 4.3 percent in the second quarter this year.
