The Department of Finance has stressed the need to complete the passage of the remaining packages of the Duterte administration’s comprehensive tax reform program to ensure a reliable revenue base that would help support the modernization of the economy and ensure the equitable sharing of funds for the government’s social and infrastructure programs, while securing fiscal stability long into the future.
Finance Undersecretary and department chief economist Gil Beltran said that for 2020, revenue collections are projected to reach P3.5 trillion of which P187.1 billion would come from tax reform.
These include P153.8 billion from the first CTRP package or the Tax Reform for Acceleration and Inclusion Law; P15.7 billion from Republic Act 11346, which raised excise taxes on tobacco products; and an estimated P20 billion to be collected from Package 2 Plus, which aims to increase excise taxes on alcohol and e-cigarette products.
Package 2 Plus was already approved by the House of Representatives on final reading on August 20.
Expenditures for 2020 are expected to reach P4.2 trillion or 19.8 percent of GDP, which translates into a deficit target of P677.6 billion or 3.2 percent of GDP that “is well within the norm for deficit spending,” Beltran said at a briefing by the Development Budget Coordination Committee for senators.
“The Executive branch will continue to be engaged with the legislature in passing the remaining tax reform packages that will generate additional revenue streams for government to fund social amelioration programs,” said the DoF deputy chief who represented Finance Sec Carlos Dominguez III at the briefing.
He pointed out that the passage and implementation of the remaining tax packages and the rest of the fiscal reform agenda would help bring the country to “A” rating territory “within the next couple of years”.
“More importantly, completing our reform programs will further secure our fiscal stability and help fulfill our shared goal of a decent and comfortable life for all law-abiding Filipinos. This means achieving our ultimate goal of bringing down poverty incidence from 21.6 percent in 2015 to only 14 percent by 2022,” Beltran added.
He said the country’s elevation from lower- to upper-middle income country status ahead of schedule next year is proof that the government can accomplish its goal of beating extreme poverty within a generation, “if we stay on course and continue to invest in the right things”.
“Please be assured that we will continue to improve on our fiscal position in the coming period while introducing reforms that will help our economy gain competitiveness. I am sure Congress shares our vision of building a strong and inclusive economy for the Filipinos today and in the years to come,” the Finance deputy chief said.
Beltran noted that for 2022, revenue and disbursement projections are estimated to rise to P4.4 trillion (17.2 percent of GDP) and P5.2 trillion (20.4 percent of GDP), respectively.