Finance submits transition ‘wish list’ for next gov’t

THE FINANCE department has drawn up a “wish list” for the incoming administration in the hope that fiscal consolidation will continue to be pursued.

The items form part of a transition report submitted last May 21 to Malacañang for forwarding to the next Palace occupant.

In the list, the department stated the need to sustain the revenue performance of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BoC).

It said the tax bureau’s LGU Assurance Project — a Web-based monitoring tool that identifies discrepancies between local government unit and BIR data — must continue, as well as its Revenue Watch Dashboard — also an online facility that allows the monitoring of collections versus targets.

For the customs bureau, the department singled out the National Single Window Program that would interconnect the computer systems of agencies involved in the clearance and release of imports; full automation of major ports; and the marking of duty-free kerosene and diesel to curb smuggling.

Anti-corruption programs such as the BIR’s Run After Tax Evaders, the BoC’s Run After Smugglers as well as the department’s own Revenue Integrity Protection Service must be pursued, it said.

The BIR needs to collect P830.4 billion and the BoC P275.7 billion this year, around four-fifths of programmed state revenues. Without new tax measures, the two must fall back on tax administration measures to boost performance.

As of end-April, the BIR’s collections amounted to P265.1 billion, higher than its P243.9-billion target for the period, while the BoC’s was P83.4 billion, also above its P77.8-billion goal.

The Finance department also called on the next administration to pursue the privatization of the following government assets: a portion of the Food Terminal Inc. complex in Taguig City; the Philippine National Oil Co.-Exploration Corp. stake in the Malampaya gas project; San Miguel Corp. shares held through the coco levy fund; and the Fujimi property in Japan.

Revenue measures to be pushed in Congress, meanwhile, include:

* the rationalization of fiscal incentives;
* review of value-added tax (VAT) exemptions;
* restructuring of the excise taxes on tobacco and alcohol;
* financial and capital market tax reforms;
* ratification of the revised Kyoto Convention;
* property valuation standards;
* optional standard deduction of 10% of gross income for corporations from the current 40%; and
* an increase in the VAT rate along with a reduction in the corporate and personal income tax rates.

The Finance department also asked the next administration to continue programs, involving the private sector, that were created to stop smuggling and corruption: the Partnership for Efficient Revenue Service for the BIR, the Port Transparency Alliance for the BoC, and meetings with the Joint Foreign Chambers.

“We need revenues to upgrade infrastructure for competitiveness and invest in social sectors to attain the MDGs (Millennium Development Goals),” Finance Undersecretary Gil S. Beltran said.

Also part of the wish list are debt strategy reforms through the creation of a Debt and Risk Management division in the Finance department and a review of the Foreign Borrowings Act, particularly on excluding official development assistance sources in the computation of the guarantee ceiling.

An expansion of the investor base of local currency bonds was recommended “to encourage local participation of foreign investors in the domestic market.”

The Finance department also called for more reforms in the regulation of financial cooperatives and microinsurance providers.

The government expects the deficit to hit P293 billion this year or 3.6% of gross domestic product, down from last year’s record high of P298.5 billion. –Businessworld