Govt to cut tax incentives, exemptions

THE government will cut the tax exemptions and incentives being extended to businesses and investors instead of imposing new taxes, President Benigno Aquino III said Tuesday.

“We are now discussing our fiscal rationalization plan. There are so many tax incentives [working] at cross-purposes,” Mr. Aquino said.

“There will also be a review if there is a need to impose new taxes, but none of my economic managers are indicating that there is such a need. Our priority is still improving the efficiency of tax collection.”

Mr. Aquino said there had been a “severe upward trend” in collections, boosting his confidence in the country’s fiscal position and making the need to impose new taxes more remote.

Earlier, presidential spokesman Edwin Lacierda said the government would be reviewing its policy of imposing no new taxes annually, a departure from Mr. Aquino’s campaign promise that he would refrain from imposing new taxes or increasing taxes during his administration.

In the budget call dated Dec. 30 for the 2012 General Appropriations Act, Budget Secretary Florencio Abad said revenue efforts would be increased to 16.3 percent of the gross domestic product from this year’s 15.6 percent through the “enactment of new revenue measures.”

“The revenue effort shall be increased to 19.6 percent of GDP at the end of six years through the implementation of administrative reforms and the enactment of new revenue measures,” Abad said.

He said while the policy encouraging Congress to pass new taxes was contained in the budget call, there were no concrete discussions yet on new revenue-generating bills. Joyce Pangco Pañares, Manila Standard Today