Government in no hurry for new revenue sources — DOF

MANILA, Philippines — The government is not yet looking to propose new revenue-generating tax measures while it waits for the economy to recover from the adverse impact of the coronavirus disease 2019 or COVID-19 pandemic, according to the Department of Finance (DOF).

In an interview with “The Chiefs” on Cignal TV’s One News, Finance Assistant Secretary Antonio Lambino said the government is not yet looking for new revenue sources despite the government’s dwindling revenues.

“We’re really not expecting to go after new revenue sources right away. We really need to wait for the economy to recover, for businesses to recover and then we’ll start focusing on that,” Lambino said.

In fact, Lambino said the government is pushing for a revenue-eroding measure, which is the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill.

The proposal is intended to help businesses recover, thereby stimulating the economy in the aftermath of the COVID-19 pandemic.

“With that as a priority we’re looking at a big reduction in the revenues so that private enterprises can use that money more efficiently,” he said.

The DOF estimates that the CREATE bill will cost the government P42 billion in foregone revenues in the second half alone. Over the next five years, the amount is expected to reach P625 billion.

The bill proposes the immediate cut in the corporate income tax rate from 30 percent to 25 percent starting July.

In addition, the CREATE bill aims to rationalize the fiscal incentives system, and allow the government to “tailor fit” fiscal and non-fiscal incentives based on investors’ needs.

However, the bill had not secured final approval from Congress before its sine die adjournment on June 5.

Meanwhile, Lambino said there are tax measures pending in Congress that would help the government raise revenues once passed.

He mentioned Package 3 of the Comprehensive Tax Reform Program, which seeks to reform the property valuation system. He said the proposal is seen to help local governments generate revenues.

Lambino said the DOF is also studying several proposals, many of which were filed by Albay Rep. and House ways and means committee chairman Joey Salceda.

Earlier, Salceda filed House Bill 6765 or the digital economy taxation bill.

Finance Secretary Carlos Dominguez said the DOF is studying the bill “very carefully” considering the transnational nature of some digital transactions.