HOUSE Ways and Means Chairman, Rep. Joey Sarte Salceda of Albay said the resilience in revenue efforts should prod government to “go big” with a stimulus package to increase consumption.
The House Committee on Ways and Means on Monday said the revenue effort of the national government remains resilient despite Covid-19 pandemic.
In a presentation on the country’s fiscal status, Salceda said the Bureau of Internal Revenue (BIR) outperformed its target by P213.84 billion or 12.68 percent in excess of the revised Development Budget Coordinating Committee (DBCC) target of P1.685 trillion for the year. Meanwhile, the Bureau of Customs (BOC) outperformed its revised target by P32.55 billion or 6.49 percent above DBCC target of P501.33 billion, the lawmaker said.
Salceda said last year’s deficit was also P444-billion smaller than anticipated by the DBCC in July 2020.
“This means we have the fiscal space for more lifeline relief during this critical period. We are probably bound for small, localized lockdowns during this second wave; that will delay economic recovery,” Salceda added. “So we need to be open to more relief in the meantime. Once the economy reopens, let’s go big with a stimulus package that will pump-prime consumption.”
The lawmaker explained that “unlike in previous crises, the national government’s revenue effort did not collapse this time, even with the deadline extensions and other tax relief that we gave.”
“Revenue effort remained very strong, only slightly declining from 16.08 percent in 2019, one of the highest ever, to 15.89 percent in 2020,” Salceda said. “Tax reforms passed by this committee form the foundation of our strongest revenue performance during any recent global crisis.”
According to the lawmaker, revenue effort is the amount of national government revenues collected during a fiscal year over the same year’s gross domestic product (GDP).
“[We’ve seen the] first major economic crisis where the country’s revenue effort did not collapse massively.”
With this, Salceda credited the “close relationship between” fiscal administration, including the Department of Finance, the BIR, the BoC, government-owned and -controlled corporations and Congress.
But Salceda, also co-chairman of the Economic Stimulus and Recovery Cluster of the House to Defeat Covid-19 Committee, said pursuing the rest of tax reform remains urgent.
According to Salceda, major tax proposals, which have already passed by the ways and means committee, will give the government P669.2 billion additional revenue in five years.
These tax reforms include the motor vehicles user’s charge, taxes on Philippine Offshore Gaming Operators or Pogos, value-added tax on digital service providers, mining fiscal regime, offsite betting on locally-licensed games and tax administration efficiency due to ease of paying taxes.
“Tax reforms are the foundation of our fiscal strength,” Salceda said. “Our children and grandchilden will have government revenues for their time, because we invested in good tax policy.”
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