The Department of Finance (DOF) has no plans of proposing additional taxes this year, according to Secretary Ralph Recto who said he would rather focus on improving collection efficiency.
But Recto said existing tax proposals will be fine-tuned.
“As to imposing new taxes, frankly speaking, there are no plans of imposing additional new taxes. I think our first job is to collect what is on the table. And that’s why we are planning with the Bureau of Internal Revenue (BIR) and Customs (BOC) to improve efficiency,” Recto said in a joint briefing with the BIR and BOC yesterday.
“We will continue to pursue the tax proposals of the DOF, but we will refine them. We’ve put in a lot of work in the last few days refining these proposals already. We will be presenting these soon in the Legislative Executive Development Advisory Council. We will then proceed to the Senate later on… and to submit to them our fine-tuned proposals,” he added.
Recto said existing proposals will be tweaked to take into consideration the inflationary environment.
“Sometimes you impose additional taxes, it’s inflationary as well. So, the fine-tuning will be on what is fairer, what is easy to collect, (and) what is practical, that’s how we’re looking at it,” Recto said.
As an example, he cited the proposed adjustment of the motor vehicle user’s charge.
“We’re tempering that proposal. Because I think motorists pay a lot of taxes. Today, 50 percent or thereabouts of vehicles are unregistered. And if you impose higher taxes, maybe more vehicles will not register, right? We have to temper some of these increases because like I said, they’re also inflationary,” Recto said
“It’s all about timing as well. We’re looking at all the tax proposals and more or less, we’re almost done with them,” he added.
When asked about other possible proposals such as junk food tax and excise tax on sweetened beverages, Recto said: “I don’t think that’s on the table today. Those two proposals were in one proposal which was scrapped by the DOF and I don’t intend to put it back. (It is) not being considered.”
There is no bill in the (H)ouse (of Representatives). So the executive did not prepare a bill anyway. And my understanding is that they did not pursue this anymore. So when I got to the DOF, it’s no longer there. And I’m not considering it. Like I said, number one, inflation is high. When you impose taxes, that is also inflationary. I don’t think that now is the time to impose very high taxes,” Recto said.
As for the Single-Use Plastic Bags Tax and the Value Added Tax on Digital Service Providers, Recto said the levies are just “minimal.”
“We’re tempering those increases as well,” Recto said.
Meanwhile, Recto acknowledged the challenging task of collecting more revenues amidst the ongoing challenges stemming from the pandemic and escalating external risks that disrupted the global supply chain and led to high inflation, a major concern for Filipinos.
“In the immediate term, inflation has to be tamed decisively and kept at bay. Ensuring prices of goods remain stable and affordable is crucial to further grow the economy, consequently enabling us to boost revenue collection,” he said.
The finance chief directed the BIR to swiftly implement the Ease of Paying Taxes Act to deliver on its promise of prompt, efficient and excellent taxpayer service, ensuring that taxpayers receive value for their contributions.
He also instructed the bureau to run after tax cheats and intensify its campaign on tax compliance in a fair manner that favors no one.
Meanwhile, Recto directed the BOC to channel all efforts towards significantly enhancing trade facilitation and strengthening border control to curb smuggling.
In this regard, he announced the DOF is working with the Office of Special Assistant to the President for Investment and Economic Affairs’ Secretary Frederick Go to implement an integrated system for pre-border verification and invoicing to reduce smuggling and misdeclarations.
Recto emphasized the need for the BIR and BOC to safeguard the integrity of their operations by putting an end to corruption.
He likewise encouraged the bureaus to accelerate their digitalization initiatives while at the same time embracing constant innovation for a more modern and effective governance system.
