MANILA – The country is liable to incur more debt if the remaining four items under the Duterte administration’s tax reform program fail the congressional hurdle, Education secretary Leonor Briones said on Wednesday.
A former national treasurer, Briones said raising revenue through taxes is the “preferred” mode. She shunned the idea of reducing expenditures in view of “accelerating demands amid an increasing population.”
She cautioned against the notion of borrowing as an option to funding and sustaining various government programs.
“We don’t want to go through that horrible experience again during the Eighties when we were drawn into the global debt crisis,” Briones said at a news conference in Malacañang.
“It took us how many years to finally recover. It’s a terrible experience,” she said.
“Interest rates will be higher. They probably will lend, but it will be at higher rates of interest. This is why I believe that tax is the better option, but we have to watch where the taxes go and we have to watch who are going to pay those taxes.”
Senators have earlier expressed their apprehensions about the proposed second package of the Tax Reform for Acceleration and Inclusion (TRAIN 2) law.
Senate President Vicente Sotto III noted that most senators were not inclined to support TRAIN 2 despite an appeal from President Rodrigo Duterte during his State of the Nation Address (SONA) on Monday.
For his part, Senate Majority Leader Juan Miguel Zubiri said that no senator wanted to sponsor the proposed second package of tax reforms.
Package Two aims to lower corporate income taxes from 30 percent to 25 percent and rationalize fiscal incentives.
A third package covers property taxation while a fourth one deals with capital income taxation and a fifth package covers environment and luxury taxation and health measures.
Passed in December last year, the first package of the tax reform law reduced personal income tax rates and at the same time raised the excise taxes for on petroleum products and automobiles and imposed a levy on sugar sweetened beverages.
Rising prices of petroleum products has prompted calls for the suspension of the TRAIN law, which imposed an excise tax of P2.50 per liter on diesel from zero and raised the levy on gasoline to P7 from P4.35 per liter.
President Duterte has emphasized that tax reform is needed in promoting inclusive growth, as additional tax revenue would help subsidize those in need. (GMA News)
