By Aubrey Rose A. Inosante, Reporter
THE Philippines’ decision to not impose new tax measures until 2028 is deemed feasible if accompanied by stepped-up enforcement against tax evaders, analysts said.
“This is possible if there is intensified tax collection… (and) running after tax cheats,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said via Viber.
Fitch Solutions unit BMI said, however, that spending pressures could mount to cushion the economy against US tariffs.
In March, government expenditure rose 35.37% to P655 billion, bringing spending to P1.477 trillion in the first quarter.
Finance Secretary Ralph G. Recto has said he is not seeking to impose new taxes or revenue measures, citing the government’s robust fiscal position.
In April, the Department of Finance (DoF) withdrew its proposal to increase capital gains tax, donor’s tax and estate tax, which could have could have yielded around P300 billion in revenue.
Mr. Ricafort said if the government fails to bring down the share of debt to gross domestic product to 60% from 62% at the end of the first quarter, it might be compelled to impose new taxes or pursue further reforms, or be stricter with its spending priorities.
He called for “avoiding wasteful spending and other leakages, anti-corruption initiatives, as well as right-sizing the government.”
Minimal Government Thinkers President Bienvenido S. Oplas, Jr. warned of the deterrent effect on investment of new taxes.
“Any new tax can adversely affect business and consumer confidence and should be avoided as much as possible. We need to focus instead on better tax administration, raising more revenue from existing taxes, and controlling spending to limit high borrowing and budget deficits,” he said.
He also called for curbing smuggling and illicit trade, to minimize revenue losses.
Mr. Oplas, citing Federation of Philippine Industries Chairman Jesus L. Arranza, said the government loses P250 billion a year from the smuggling of petroleum, alcohol, tobacco, jewelry, clothing, and other items.
“Another good policy is more privatization. Lots of big-ticket items, hundreds of billions of pesos, can be realized from this alone,” he said.
According to the DoF’s Privatization and Management Office, the Caliraya-Botocan-Kalayaan power project privatization can raise between $200 million and $600 million.
The government’s outstanding debt, currently at P16.68 trillion is expected to hit P20.7 trillion by the time President Ferdinand R. Marcos, Jr. steps down.