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FINANCE
Secretary Margarito Teves gave assurances Wednesday that
the planned rationalization of fiscal incentives should
compensate for the anticipated revenue losses arising
from the cut in income-tax rate by next year.
Teves
gave the assurance to lead Fitch Ratings analyst James
McCormack, who earlier raised concerns over the
sustainability of the government’s revenue flows between
now and the medium term.
The
issue of sustainability directly impacts on the
country’s double B credit standing as Teves and others
in the economic cluster seek to soothe the issues that
Fitch had raised.
According to Teves, both the House of Representatives
and the Senate have agreed in separate proposals to
rationalize the current fiscal-incentives structure.
Simplifying the excise-rate structure meant reducing the
number of excise classes to just two from the current
four, enabling the collection arms of government to
benefit from increased efficiency.
For
example, the current excise for cigarette products has a
schedule of four, Teves noted.
Moreover, the increased efficiency should adequately
make up for the anticipated revenue losses arising from
the scheduled reduction in income tax to only 30 percent
by next year from the existing 35 percent, Teves said.
“Our
priority now is to look for resources to finance
economic growth and ensure food security,” Teves told
McCormack shortly before the Fitch analyst left Manila
Wednesday morning.
Teves
had told McCormack the current year has proven more
difficult for everyone in government, particularly for
main collection agencies Bureau of Internal Revenue and
the Bureau of Customs.
“The
situation has become more challenging and we need
Congress’s support for the fiscal measures,” he said,
adding there has been “convergence” in both Houses of
Congress on the need to fortify the Government’s revenue
flows. |
