August 19th, 2022
House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) says that President Marcos has “many fiscal options to enable rapid growth” and that “there are non-tax sources” available immediately to the President, during his speech at the 1st Tax Symposium of the accounting giant SGV.
“There are funds available for him to deploy, to fight inflation, take the first steps towards food security, and protect the country’s economic recovery,” Salceda said, in comments subsequent to the speech.
During his remarks, Salceda pointed out that “at least 180 billion in non-tax sources that are not in the Budget of Expenditures and Sources of Funding or BESF can be mobilized quickly.”
Among such sources, Salceda pointed out equity withdrawals from government financial institutions after the purpose of such infusions had lapsed under Bayanihan 2, the discontinuance of undistributed unconditional cash transfers from the TRAIN Law, the sale of bunked gas from the Malampaya field to the Ilijan Power Plant, and the privatization of the now-defunct Legazpi Domestic Airport.
“PBMM can also undertake a cash sweep similar to what PRRD did in 2019, the privatization of casinos under PAGCOR, and the streamlining and renationalization of approvals for reclamation projects,” Salceda added.
Salceda also said that “Public-Private Partnerships [are] likely to make resurgence, as PBBM directed legislation of new PPP framework.”
Salceda also said that the Bangko Sentral ng Pilipinas can increase its dividends to the National Government, due to realized revaluation gains on foreign currency assets, as the peso’s value hit near-record-lows this year.
“I think some P16.2 billion in realized gains on foreign currency appreciation have been made by the BSP from March to July alone,” Salceda added.
Salceda added, however, that new taxes still need to be imposed, to support an aggressive national infrastructure program, which Salceda says is still the best form of public investment.
“Our tax make-up is also still heavily on income, at around 53% of total internal revenue take. We need to increase our share of tax revenues from taxes on bad habits,” Salceda added.
Salceda enumerated increases in taxes on pre-mixed alcoholic beverages, gambling, mining, and other areas as within the agenda of the House tax committee.
House tax panel to pursue global tax agenda
Salceda also said that the House is already discussing its ways forward in “ensuring that the Philippines receives its just share of taxes from global transactions.”
Salceda cited that digitalization and cross-border transactions have made it harder for traditional tax policies to collect revenues.
The House tax panel chair says that the committee has already formed a working group with the Department of Finance to study imposing a “minimum income tax” of 15% on the “book income” of corporations.
“This will ensure that companies with large discrepancies between their income as reported to shareholders and their income as reported to tax authorities will be imposed a baseline tax. Highly profitable companies (that do not need the tax incentives, hence high book income even before these deductions) will pay significant taxes,” Salceda said.
Salceda also said that the committee will continue to pursue policies to control tax base erosion and profit shifting schemes, or schemes by multinational corporations to reduce their tax liabilities by shifting around their costs among related parties.
“The Committee will also continue its efforts to get the country’s fair share of taxes from digital and cross-border transactions where at least one party is a Philippine resident,” Salceda said.
Tax panel to provide fiscal space for “Marcosian-sized” public investment program
“These efforts will make sure that the President has enough fiscal space to pursue a more ambitious public investment program. We need big visions from President Marcos. His surname evokes largeness. Marcosian means massive. Things like a bridge from Matnog to Allen, from Guimaras to Iloilo, from Mindanao to Leyte.”
“Of course, the larger the vision, the larger the fiscal space needed. My committee will do its best to give him that need.”