No need for tax hike on oil, just rationalize fiscal incentives - Drilon
The online news portal of TV5
MANILA, Philippines -- Senate President Pro-Tempore Franklin Drilon on Thursday said government economic managers should focus on rationalizing fiscal incentives to businesses rather than raising taxes on oil products to generate additional revenues.
“I hope that our economic managers will work closely with Congress for the long-sought Rationalization of Fiscal Incentives law instead of spending its time on a tax hike on petroleum products that will surely negatively affect our people,” Drilon said in a statement.
“If our aim is to increase revenues, then the government should look at reviewing the various laws on the grant of tax incentives and plug the leakages in our tax system,” he said.
He advised President Rodrigo Duterte's economic managers to exhaust other means to compensate for expected revenue losses from the proposed income tax cut.
"We should not pass the buck and shift the burden to our people," he stressed.
Drilon is the author of Senate Bill No. 229, which seeks a review of government’s system of granting incentives to businesses “in order to ensure that grant of incentives promotes social and economic benefits to Filipinos.”
There are 186 laws on fiscal and non-fiscal incentives and subsidies, including income tax holidays, deductions, exemptions, credits or exclusions from the tax base, he noted.
These sometimes redundant incentives, he said, have resulted in billions of pesos in forgone revenues that could have been used to fund much-needed social services.
“Through this measure, we can ensure that the foregone revenues resulting from all fiscal incentives given by the state to private entities really translate to economic benefits for Filipinos, such as additional jobs or financial opportunities, countrywide development and promotion of micro, small and medium enterprises,” he said.
He recalled that during discussions of the measure in the previous Congress, the Finance department said if enacted, it would generate “a whopping P30 billion around a period of time.”