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Government to finalize new revenue measures this week |
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By Elaine Ruzul S. Ramos, Reporter
The Manila Times, Tuesday, 13/04/2004 THE interagency Development Budget Coordination Committee (DBCC) is mapping out P50 billion worth of new revenue-generating measures to prop up its budget position next year. "The increase in revenues will finance the planned increase in government salaries," a source from the Department of Finance (DOF) said. A confidential DBCC document based on agreements made during its most recent executive technical board meeting held March 31, showed the government would finalize the revenue measures during its next meeting this week. Apart from the new revenue measures, the DBCC is also finalizing its program to minimize tax incentives. Sources from the Finance department estimated that on top of additional revenues from new measures, the fiscal incentive rationalization program could yield up to P4 billion in additional revenues for government. Although some of the measures have long been in the pipeline, the source said these would likely have an impact only in 2005, assuming the key measures are passed this year. One of the measures that are seen to boost government revenues by next year is the long-awaited indexation of excise taxes on "sin" products such as beer and alcohol. This reform, which has long been pushed even by the International Monetary Fund (IMF), is seen to yield P13 billion in new revenues. Another measure involves reforms in income taxes "specifically the imposition of limits on allowable deductions" but these could be done through administrative measures. Under the comprehensive tax reform program passed during the Ramos administration, there were limits slapped on deductions such as for traveling and food expenses. However, these have not been implemented since then. Another controversial measure being proposed and is expected to raise P50 billion in additional funds needed for next year, is the imposition of tax on text messaging or short messaging system (SMS). Another DOF source said this measure could yield P1.8 billion at the very least to as much as P18 billion in additional revenues depending on the rate to be imposed. The range assumed the lowest possible tax at 5 centavos per text to as high as 50 centavos per text. The sources said the DOF has prepared a list of all possible measures but the DBCC would have to pick which ones are the most doable. The documents said the DBCC was also scheduled to discuss this week the formulation of a program for the aggressive marketing plan for domestic borrowing, including the costing and resources needed by the Bureau of Treasury; firming up of foreign borrowing program including the greater accessing of program loans; identification of expenditure items for devolved functions in the national agency budgets; and identification of properties for privatization for earmarking and deficit-reduction purposes. The government plans to put a ceiling on its budget shortfall next year at P188 billion from the P197.8 billion programmed for this year. Under the existing program, the government can only attain a balanced budget by 2010. |
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