Pay the right taxes, Marcos urges public

MANILA, Philippines — President Marcos called on the public yesterday to pay the right amount of taxes on time as he ordered revenue officials to work to achieve people’s confidence in the tax system.

“I encourage the public to pay the correct amount of taxes on time to support the country’s economic recovery and expansion so critical in this time,” Marcos said during the tax campaign launching held at the Philippine International Convention Center in Pasay City.

“It is my hope that you will continue to cooperate, collaborate and coordinate with the government on how to improve the experience of our tax collection system,” he added.

Marcos expressed confidence that the synergy between the government and taxpayers would give rise to more opportunities for growth as the country is recovering from the adverse impacts of the pandemic.

He directed officials of the Bureau of Internal Revenue (BIR) to enhance tax collection efficiency by pursuing their digitalization efforts.

“As we move forward to the future, the importance of utilizing modern and updated technology to ensure a more tax efficient collection becomes absolutely imperative. It is my hope that the bureau will continue its commitment to pursuing and upgrading its digitalization programs,” the President said.

Marcos also challenged BIR personnel to work toward further gaining the confidence of the public in the tax system by “upholding the highest standards of integrity, professionalism and competence in the performance of your duties.”

“I assure the BIR that this administration will always give its support in your aspiration of developing a country that is conducive for employment opportunities, financial investments and institution-building,” he said.

Marcos lauded the BIR for its efforts to run after tax evaders.

In 2022, a total of 115 cases were filed before the justice department amounting to P5.1 billion in tax liability, while 38 cases were filed before the Court of Tax Appeals amounting to P5.32 billion in estimated tax liability.

The Oplan Kandado program also enabled the BIR to collect P550 million, Marcos said.

The bureau’s tax compliance drive, Marcos said, resulted in the collection of more than P250 million last year.

Luxury goods tax

Marcos expressed support for House Bill 6993, which aims to impose higher taxes on luxury goods.

Marcos said the current tax imposed on luxury goods only covers specific items whose demand remains the same regardless of the economic situation.

“For the rest of us who are not necessarily consumers of luxury goods, we feel the slowdown in the economy. If we look at the luxury items, the luxury cars, designer apparel and bags, the prices do not change because the rich people buy them,” the President said.

“I think it’s reasonable that we will tax the consumption side of those who are consuming luxury items,” he added.

Albay Rep. Joey Salceda, principal author of the bill, has said the government could generate P15.5 billion every year if luxury taxes are raised from 20 percent to 25 percent.

P2.6-T target eyed

The BIR is targeting to collect P2.6 trillion in revenues this year amid an expectation of economic slowdown here and abroad.

BIR Commissioner Romeo Lumagui said the target collection for 2023 is at P2.6 trillion, 11 percent higher than the P2.34 trillion revenues last year.

Lumagui said he is confident of meeting such targets even as global and local banks are predicting a worldwide recession next year. Even the economic team has reduced its gross domestic product (GDP) expectation to six to seven percent this year.

“Definitely, there will be an effect but we are addressing it. We have plans and programs to address those situations and we are confident that we will be able to do what is necessary,” Lumagui told reporters.

“We will provide excellent taxpayer service. We will focus on providing convenience because when we accomplish that, taxpayers will voluntarily comply with their obligations. And of course our digitalization efforts,” he added.

Finance chief Benjamin Diokno, for his part, emphasized that the economy’s performance would drive revenue collections this year.

To date, tax effort as a percentage of GDP is at 14.6 percent and this is seen increasing to 17.1 percent by the end of the Marcos administration.

“We have tax elasticity. The stronger the economy, the higher the revenues,” Diokno said.

He maintained that revenues are the lifeblood of any government, for without them there will be no means for financing essential public goods and services.

Diokno noted that the early years of post-pandemic recovery are critical and thus, the need to ramp up spending on infrastructure development to provide jobs, improve overall productivity and encourage new businesses.

“This is a tried and tested strategy to drive inclusive growth, reduce poverty incidence and accelerate regional development,” he said.

Diokno called for widening the tax base, simplifying the process of tax collections and providing a revenue system that is simple, fair and efficient.

As the BIR enters the tax season, the finance chief urged revenue collectors to “faithfully, efficiently and fairly” collect taxes to finance government programs.

“We will need the full support of taxpayers, especially the new generation of entrepreneurs and emerging businesses in the economy in mobilizing fiscal resources for our country’s recovery and development,” Diokno said.

“We will make sure that every cent of tax money goes to the progress of our country,” he added. – Louise Maureen Simeon

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