Senate chief favors better collection over new taxes
By John Victor D. Ordoñez, Reporter
NEW PHILIPPINE Senate President Francis “Chiz” G. Escudero on Thursday said he favors improving tax collection over new taxes.
“[Finance] Secretary [Ralph G.] Recto and I are on the same page,” he told reporters. “No. 1, improve collection first before imposing new taxes… No. 2, prevent leakages in government and make sure every peso is spent wisely.”
Mr. Escudero said he is set to meet next week with Mr. Recto, who also shuns new taxes under President Ferdinand R. Marcos, Jr.
The Senate on Monday approved on final reading a bill that seeks to impose a 12% value-added tax (VAT) on digital services provided by companies with no physical presence in the Philippines.
Senator Sherwin T. Gatchalian, who sponsored Senate Bill No, 2528, earlier said the measure would allow the state to collect “the tax that we ought to be collecting from nonresident digital service providers.”
He has also filed another bill that seeks to transfer the duty of handling VAT refund claims to the Department of Finance’s Revenue Operations Group to address delays under the Bureau of Internal Revenue (BIR).
“By optimizing the existing tax system and enhancing compliance, the government can boost revenues without imposing new burdens,” Security Bank Corp. Chief Economic Robert Dan J. Roces said in a Viber message.
“Minimizing wasteful spending and ensuring judicious use of public funds through improved transparency and oversight will optimize resources and build public trust,” he added.
Mr. Recto in March said imposing new taxes could increase smuggling and illegal trade since tax rates are already high.
The Senate is set to continue floor debates on a bill that will overhaul the pension system for the military and police by requiring them to contribute 7% of their monthly income. The National Government will contribute double the rate.
Mr. Escudero said they would scrutinize the bill to ensure it does not lead to revenue leakages.
A House of Representatives bill that seeks to amend the fiscal regime for the mining industry is being tackled in technical working groups in the Senate before they get sponsored in plenary.
The Chamber of Mines of the Philippines earlier said the mining industry is overtaxed.
“This (improving tax collection) is the right thing to do to lessen the burden on citizens who are already plagued by higher inflation and interest rates,” Jonathan L. Ravelas, senior adviser at Reyes Tacandong & Co., said in a Viber message. “Adding new taxes will be a drag to the economy.”
Meanwhile, Mr. Escudero opposed a proposal to restore the National Food Authority (NFA)’s power to import and sell rice at subsidized prices during emergencies, which he said could worsen corruption. He added that the Department of Agriculture (DA) could handle rice imports and sales.
“The system must be fixed so that anomalies and corruption can easily be caught,” Mr. Escudero said in Filipino. “Any corruption, we must remember, is an added cost to what we will pay for rice.“
The House approved the bill on final reading on Tuesday. It will amend the Rice Tariffication Law, which gave private traders full control over rice imports. The Senate has yet to tackle the proposal.
The law, enacted in 2019, deregulated rice imports, allowing private parties to import at a tariff of 25% on grain brought in Southeast Asia.
