go through Kenneth Christian L. Brazilian Rio, reporter
The government will not exist 20Th Congress, Finance Minister Ralph G. Rector (Ralph G.
Talk to reporters after briefing of the Development Budget Coordination Committee House of Representatives On Monday night, Mr Recto said the Marcos administration will focus on previously proposed measures, including excise tax and tax amnesty plans for single-use plastics.
When asked if the Ministry of Finance would support other tax plans, Mr. Recto replied: “No.”
He also said the government has not considered increasing the existing tax rate either.
“We’re only disposable plastic left, which is the first,” he said. “It could also be a tax amnesty.”
Mr Recto earlier stressed that new revenue measures were unnecessary, suggesting that he described it as a “strong” fiscal situation in April.
Government data shows that the debt-to-debt ratio in the Philippines has risen to 63.1%, the highest since 2005 to 63.1%. The figure remains above the 60% threshold, and multilateral lenders believe it is manageable for developing economies.
Although the debt ratio is expected to rise to 61.3% at the end of the year, it is still above the 60.4% target, according to the finance department’s handout.
Unpaid debt hit a record P172.27 trillion in June, up 2.1% from the previous month and 11.5% from the same period last year.
The excise tax on disposable plastic bags is one of 28 priority bills identified by the Legislative Execution Development Advisory Committee. Although it was approved by the House in 2022, the measure is trapped on the Senate Ways and Means Committee.
The Ministry of Finance said last year that the government could raise the consumption tax on disposable plastic bags to pesos 33.8 billion.
The house has approved three measures in the house, all of which attempt to impose a P100 per kilogram of consumption tax on disposable plastic bags. The Senate peer bill proposes a lower P20 rate per kilogram.
Mr Recto said in early August that the government is also considering proposing a tax amnesty that involves amnesty charges set at a percentage of outstanding unpaid taxes that have not been determined in exchange for immunity to civil, criminal and administrative penalties.
Members in the House and Senate are pushing for general tax amnesty, which will grant taxpayers a 2% amnesty rate in 2024.
Oikonomia Advisory and Research, Inc. Reinielle Matt M. Erece said the decision to introduce new taxes was a “good move.”
“More taxes will effectively reduce the disposable income of the household, because more income will lead to taxes rather than consumption,” he said in a Viber message.
He added: “Financial consolidation is important for better management of debt and budget efficiency, but if it comes at the expense of economic performance, it is best to rethink the strategy to achieve this.”
While excise taxes on single-use plastics and tax amnesty can increase state revenue, the government should consider expanding the tax base and ensuring the “future” of income sources, said John Paolo R. Rivera, a senior fellow at the Philippine Development Institute.
“These should be seen as complementary, not core measures,” he said in a Viber message. “What we need is better tax management, improved law enforcement and expanded coverage of existing tax measures.”
Mr Rivera said that if the Treasury reversed its initial position, it should consider its impact on Filipino consumers and businesses.
“Any move must weigh the risk of inflation and its impact on consumers and businesses.”
