FINANCE Secretary Ralph G. Recto received a smooth-sailing confirmation from the Commission on Appointments (CA) on March 13, 2024 and has committed to pursuing growth-enhancing fiscal consolidation through plugging tax leaks, improving tax administration, preventing wasteful expenditures, exercising prudent debt management, and boosting investments.
These strategies were underscored by the Finance Chief during his opening statement to achieve the ultimate objective of promoting inclusive growth that improves the quality of life of all Filipinos and secures future generations.
To finance the PHP 5.767 trillion national budget for this year, Secretary Recto said the Department of Finance (DOF) is faced with the huge task of raising PHP 15.8 billion daily.
Of the total, PHP 11.7 billion will be supported by tax revenues, while PHP 4.0 billion will be sourced from borrowings.
These funds will be mainly utilized to fund sustained investments in infrastructure and human capital development.
Secretary Recto noted that the urge to inflict taxes is evident as the needs of the growing population outpace revenues. However, he emphasized that such must take a backseat to grow the economy by prioritizing plugging tax leaks, improving tax administration, and preventing wasteful expenditures.
The Finance Chief has given marching orders to the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) to accelerate their respective digitalization initiatives to enhance tax and customs administration efficiency and ease the payment of taxes for taxpayers.
Through the implementation of the Ease of Paying Taxes (EOPT) Act, processes were streamlined and taxpayers can now file and pay their taxes electronically anywhere in the country.
“[T]he best way to inculcate tax obedience is still to promote ease of payment, and to show that taxes that are efficiently collected are effectively spent,” Secretary Recto added.
“This covers ODA [official development assistance] projects because the people must be told not only where their taxes go, but where the debts they are paying for also go,” he stressed.
The DOF has already begun its series of visits to ODA-funded projects starting with the Metro Manila Subway Project (MMSP) on February 26, 2024 to ensure its efficient implementation so that Filipinos can benefit from the project at the soonest possible time.
Along with enhanced tax administration, the DOF has been pushing for the passage of its refined priority tax measures in Congress that are meant to “maximize the gains, minimize the pain, and institute fairness and fiscal consolidation”.
These priority tax measures include the proposed value-added tax (VAT) on digital service providers (DSP); the imposition of excise tax on single-use plastics (SUPs); Package 4 of the Comprehensive Tax Reform Program (CTRP); the Rationalization of the Mining Fiscal Regime; and the reform on the Motor Vehicle Users’ Charge (MVUC).
In an earlier statement, the Finance Chief said he refined the measures to consider the current economic situation while taking into account the unintended consequences these proposals may have in terms of affecting inflation and growth in certain sectors.
Secretary Recto urged Congress to pass all the priority reforms within the year.
“[T]ogether we can develop strategies to efficiently mobilize fiscal resources and prevent leakages so we can finance growth, manage debt and protect our people in these challenging times,” he emphasized.
The Finance Chief also said that the DOF prioritizes curbing inflation through its comprehensive plan––the Reduce Emerging Inflation Now (REIN)––to protect the purchasing power of Filipinos, especially the vulnerable.
“After all, inflation is an unlegislated tax the people should not bear,” the Finance Chief said.
