Campaign promise of ‘no new taxes’ stays – Palace

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The Aquino government will keep its campaign promise that it will not impose new tax measures; instead it will continue exhausting efforts to plug collection leakages and loopholes and push for the restructuring of sin taxes

MANILA, Philippines – The Aquino government will keep its campaign promise that it will not impose new tax measures before it fully exhausts efforts to plug collection leakages and loopholes. 

In a press briefing on Monday, Jan. 2, 2012, Presidential spokesperson Edwin Lacierda said new taxes will continue to be a last resort in raising funds for the government coffers.

“So far, we have not changed that position yet. As far as I know, we are going to use increase in taxes as a last resort,” he told reporters.

He said President Aquino does not want to “add additional burden” to tax payers. He made this campaign promise when he ran and won the 2010 presidential race. 

Finance secretary Cesar Purisima, who supported the president during the campaign, has been pursuing a name-and-shame campaign against tax evaders and smugglers to address leakages. 

Sin taxes

Lacierda said that the Aquino administration will instead pursue tax reform measures such as the restructuring of excise taxes on alcohol and tobacco products to improve revenue collections.

Health and reform advocates have been pushing for the restructuring of the excise tax rates on sin products, such as cigarettes and alcohol. Surveys commissioned by former finance secretary Margarito Teves have shown that imposing sin taxes are acceptable to taxpayers, but reform measures have languished in Congress. 

President Aquino had earlier said that the restructuring of sin taxes, which is estimated to generate P60 billion in additional revenues annually, is in his legislative agenda this year. 

“We’re rationalizing also the fiscal incentives to bring about greater collection in the tax,” he added, referring to tax breaks granted to investors who would have poured in money even without the incentives. 

The Aquino government is not pressured to increase revenues since spending has been muted in 2011, largely due to delays in infrastructure and other programmed spending.

Big-ticket projects, including roads, airports and rail systems, have been put in the back burner as the Aquino government conducted basic governance checks.

Previous administrations who had to hike tax collections faced fiscal crises when the gap between national revenues and expenses grew unsustainably wide. –

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