Finance Secretary Ralph Recto indicated that it is possible for the administration to refrain from implementing any new taxes until the end of its term.
On the sidelines of the Economic Journalists’ Association of the Philippines induction ceremony at the Department of Finance Thursday evening, Recto said he would first like the focus to be on improving collection efficiency.
Together with existing tax policies and with the potential for increased revenues as the economy grows, Recto said “there is a possibility” that there will be no new taxes or tax increases during the entire term of the administration.
“I think we should try first to collect what’s there. There are still a lot of leakages. I think it is incumbent upon this administration, any increase in tax is a last resort,” Recto said.
“Personally, I think the taxes are already high. What can you tax? Sixty percent of our revenue already is indirect tax. And it’s the most efficient way to collect, indirect tax,” he added.
Recto said he is willing to look at existing user fees and charges, if it should warrant any increase.
However, aside from the existing revenue measures already pending in Congress, the finance chief opts to focus on the current tax structure.
“Remember, our situation is not bad. Our debt-to-GDP (gross domestic product) is 60 percent. It’s not that bad, and it’s going down. (Instead,) I think we should reduce expenditures that are unessential,” he said.
Asked if there would be any trigger that could push him to consider introducing new taxes, Recto said: “Hopefully, there will be no trigger. I think it is prudent for us to say that we should try improving the collection efficiency first.”
The finance chief also pointed out that the best way to grow government’s revenue is to grow the economy.
Asked about the possibility of removing some exemptions, Recto said: “I think we should not give away more taxes. That’s what I would rather focus on, no erosion of the revenue base. Protect whatever we have.”
