DOF banks on new taxes to hit 2024 revenue goal

Finance Secretary Benjamin Diokno  | INQUIRER.net/Ryan Leagogo

MANILA  —Finance Secretary Benjamin Diokno expects some of the Marcos administration’s new tax measures to clear the Senate hurdle in the first quarter of 2024 and help the government beat its revenue target this year.

“We have several tax measures pending in the Upper House. It has already been approved in the Lower House so I expect those tax measures to be approved in the first quarter of this year,” Diokno said in an interview with Bloomberg TV on Friday.

“So we’re fairly comfortable that we’d increase new taxes plus increase our revenue efficiency collection,” he added.

So far, the Department of Finance (DOF) wants President Marcos to give presidential certification to speed up passage of the following bills: Package 4 of the Comprehensive Tax Reform Program; the Value Added Tax on Digital Service Providers; Excise Tax on Single-Use Plastic Bags; and Excise Tax on Sweetened Beverages and Junk Food.

READ: DOF presses tax reforms to cut budget deficit

The DOF is also pushing for the passage of CTRP package 3 or the Real Property Valuation and Assessment Reform (RPVAR), and the VAT refund for non-resident tourists.

RPVAR aims to improve real property tax collections by updating property valuations without increasing or imposing new taxes. The bill had passed third reading at the House of Representatives on Dec. 12, 2022, while its counterpart measure in the Senate is nearing the end of deliberations.

VAT on digital service providers

Meanwhile, the bill on VAT on digital service providers was approved on third reading at the House in late 2022 while the Senate version is up for committee members’ approval.

The proposed VAT refund for foreign tourists cleared the Lower House in March 2023 while its counterpart in the Senate has been sponsored by Sen. Sherwin Gatchalian, who chairs the Senate Committee on Ways and Means. The measure will be up for plenary debates this month.

READ: Under Marcos, ‘costly’ Maharlika wins over crucial tax reforms

These measures, Diokno said, would help the Marcos government beat its revenue target of P4.23 trillion this year.

In the same television interview, the finance chief said the government would borrow $5 billion via the sale of global bonds this year to help bridge its budget deficit of P1.4 trillion. The bonds will be offered to investors “toward the end of the first semester,” Diokno said.

“We really try to look at the market situation and so we’re not in a hurry to raise that yet because we expect, of course, interest rates to go down (in 2024),” he said.