Govt urged to stop imposing more taxes, improve collection system

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Metro Manila (CNN Philippines, May 30) —  A lawmaker is urging the government to improve its tax collection system, instead of imposing more levies that will only burden Filipinos.

Speaking to CNN Philippines' The Source on Monday, AAMBIS-OWA Party-list Rep. Sharon Garin responded to the proposal of the Department of Finance to boost its tax collection efforts under the next administration to settle the country's debt.

"I would like to revisit that first. That's not the way to go. Let's check muna (first), let's review," the Deputy Speaker said.

"Merong mga (There are) taxes na (that) yes, we need to review it because it's about time but we don't need to add more taxes for the sake of collection," she added. "Marami diyang potential ang gobyeno (There's a lot of potential for the government) for collections rather than adding the burden to the people again."

"If we need a new law, improve the implementation on the administrative," she also noted. "On efficiency, we need to be more efficient rather than keeping on taxing and taxing."

According to Garin, this was exactly why Congress passed specific measures in the past, like the Corporate Recovery and Tax Incentives for Enterprises, or CREATE law, to help people save on tax payments.

Signed into law in 2021, CREATE is part of the government's tax reform program designed to cut the corporate income tax rate to 25% from the current 30%, to be reduced further by 1% annually until it reaches 20% by 2027.

"Lahat ng tools for collecting agencies, especially BIR, pinasa na ng Kongreso, and in place na (All the tools for collecting agencies, especially the Bureau of Internal Revenue, were already passed by Congress and are in place.). It's a matter of implementation," she said. "Now we don't have an excuse not to be more efficient in collecting taxes."

Last week, the Department of Finance proposed tax reform packages that can be applied from 2023 to 2025, in a bid to raise at least ₱249 billion in revenues annually and pay the country's ₱3.2 trillion in incremental debt.

These packages include a three-year deferment of the reduction of personal income tax under the Tax Reform for Acceleration and Inclusion law, an expansion of value added tax on specific sectors, reform on health taxes, an increase in petroleum excise tax, as well as tax on cryptocurrencies, single-use plastics, and luxury goods, among others.

READ: Deferring personal income tax reduction, more taxes pitched to help Marcos admin settle PH debt 

The DOF described the packages as "fair, efficient, and corrective," which are projected to yield an annual average of ₱349.3 billion under the administration of Ferdinand "Bongbong" Marcos Jr.

Bangko Sentral ng Pilipinas chief Benjamin Diokno, the incoming finance secretary, has assured that he will "certainly" look into the fiscal consolidation plan, emphasizing that the current tax system is "much, much better" than the one inherited by the incumbent administration.

READ: Diokno to look into PH debt sustainability, review proposed tax system as DOF chief

In a separate interview with CNN Philippines, tax expert Mon Abrea agreed with Diokno's statement on improving tax collection first before discussing any additional taxes.

Diokno earlier told CNN Philppines that he believes "the focus should be on tax administration first before reforming the tax system, which I said is superior to the previous one."

"[K]ung merong proposal na dapat unahin: i-lift ang bank secrecy, i-implement ang general tax amnesty, at syempre pangunahan ng Pangulo ang pagbabayad ng tamang buwis para alam mo 'yun, merong magandang simula--clean start and good example para sa lahat ng ating mga kababayan," said Abrea.

[Translation: If there's a proposal that should be prioritized, it should include: lifting bank secrecy, implementing general tax amnesty, and of course the President should rightfully pay his taxes so that you know, there's a good, clean start and good example for all our fellow citizens.]