Higher taxes top Neda list

Subesident-elect urged to widen cash transfers

THE National Economic and Development Authority (Neda) will propose higher taxes, rice sufficiency, expansion of conditional cash transfer and bigger infrastructure spending to be included in the country’s economic blueprint.

Augusto Santos, acting Socioeconomic Planning secretary, on Monday told reporters that Neda will submit a strategic Medium Term Philippine Development Plan (MTPDP) to incoming President Benigno Aquino 3rd on Wednesday, which identifies priority programs for the next six years of the new administration.

“We intend to submit the memorandum on Wednesday. We are giving choices to the new administration,” Santos said.

He allowed that the incoming President may accept, reject or revise Neda’s proposal. “It’s his prerogative to accept it or not,” Santos said.

He added that the new administration should consider raising the value-added tax to 15 percent from the 12-percent VAT at present.

Santos urged the incoming President to revisit tax bills pending in Congress for the past five years such as those on sin taxes and rationalization of fiscal incentives.

“We feel that these are necessary and sound taxes,” he said.

“Maybe, we can consider further reduction of corporate income tax,” Santos added.

The acting Socioeconomic Planning chief said that the new administration has a choice to balance the budget in 2013 or 2016.

Under the Arroyo administration’s MTPDP, the government plans to balance the budget by 2008.

The original target, however, was abandoned because of the global financial crisis.
Santos said that Neda would push to continue and expand the conditional cash transfer (CCT) to help poor Filipinos.

“We are recommending the expansion of the CCT program because, based on the definition of poverty, there are about five million poor households,” he added.

Santos said that the additional four million households under the program would cost the government about P40 billion a year.

Currently, he added, the government spends around P10 billion a year for one million poor households or P10,000 a household.

The CCT under Pantawid Pamilyang Pilipino Program (4Ps) provides poor households P500 a month for health and nutrition needs and an additional P300 a child in school, for a maximum of three children a family.

Santos said that the 4Ps has a large economic and social impact because the subsidy is directed at the poor households.

Neda will also propose rice sufficiency under the Aquino administration.

“This would require a lot of investment particularly in irrigation,” Santos said.

“We would be asking for necessary public investment, particularly in infrastructure,” he added. –Darwin G. Amojelar Senior Reporter, Manila Times