THE DEPARTMENT of Finance (DoF) has proposed that the government impose new taxes to pay for the Philippines’ burgeoning debts.
Not so fast.
It’s true that the government needs increased revenue but is this the right time to impose new taxes or tax hikes?
We are still reeling from the impact of the pandemic. Filipinos are only just beginning to regain their health and livelihoods — will the government make recovery harder for us than it already is?
We haven’t even stood yet, and we are now planning to bury ourselves in the new bills again?
To raise government revenue for debt payments, the DoF said it is studying the imposition of new taxes; removal of all exemptions to the 12 percent value-added tax (VAT) payment; and an increase in excise taxes on cigarettes, alcoholic drinks, and sugar beverages.
The Philippines ended 2021 with an outstanding debt of P11.73 trillion or a 19.7 percent increase from 2020. This translates to a 60.5 percent ratio of public debt to gross domestic product, representing a 16-year high.
We have to pay the debt but we must not take the government debt repayment from senior citizens, persons with disabilities, dying exporters and other VAT-exempt people. Let’s think of a way to meet our responsibility without torturing the people.
Some 10 million senior citizens and 1.4 million persons with disability (PWDs) are entitled to VAT exemption. In December 2021, the Bureau of Internal Revenue also exempted from VAT payment all registered exporters that purchase goods and services from local suppliers.
Instead of raising taxes, the government should consider selling its assets and maximizing public-private partnerships (PPP) to fund infrastructure development. There are 63 PPP projects in the pipeline now, but this could be expanded by the next administration.
There are ways to free up fiscal space for debt payments, instead of immediately looking at new taxes. PPP is the way to go. For the long term, the government should exert more effort into eliminating corruption, which is bleeding us P700 billion annually. That’s enough to build 1.4 million housing units!
