The National Economic and Development Authority (Neda) again pushed for the implementation of tax reforms that will discourage the ‘bad habits’ of Filipinos, such as drinking soft drinks.
These reforms include imposing a 10-percent ad valorem tax on soft drinks and carbonated drinks, and increasing excise taxes on petroleum, Neda Assistant Director General Rosemarie G. Edillon said.
Edillon said the soft drinks tax will help improve health, particularly in reducing the number of diabetic Filipinos, while higher fuel taxes can help ease traffic in Metro Manila.
“Since we really cannot [control it], again, this is your private behavior, [we] can only regulate it through the tax system. We really need tax reform to improve efficiency and to improve equity,” she told reporters.
Edillon said Neda is also in favor of reducing personal income taxes and to peg it to inflation.
This, she said, will help the government broaden its tax base and increase revenues.
Proposed tax reforms are expected to be tackled during the interagency Development Budget Coordination Committee (DBCC) meeting on Monday.
Edillon said the DBCC’s executive technical board (ETB) will be presenting its macroeconomic targets based on two scenarios—a business-as-usual scenario and a tax-reform scenario.
She said the DBCC’s Cabinet Committee, chaired by Budget Secretary Florencio Abad, will decide on the economic targets by first considering tax-reform measures.
Tax-reform proposals could be discussed as the government needs to firm up its sources of revenues to sustain its implementation of macreconomic reforms.
The DBCC is one of seven interagency committees under the Neda Board. The Neda Board is the highest policy-making body in the government and is chaired by the President.
Apart from making economic targets, the DBCC is also tasked to recommend to the President levels of annual government spending for economic and social development, national defense and debt service.
It allocates expenditures for various government activities and amounts allocated for capital outlays for various infrastructure projects.