DOT readies Korea marketing blitz
By now, we should be getting a feel on where the results of the elections are headed. From all indications, it is likely to be an administration-dominated House of Representatives, while the Senate will remain under the helm of the opposition.
On the political front, this means any new attempt to impeach President Arroyo is dead since it is unlikely to be successful in the first battleground, which is the Lower House.
Given this outlook, most global investment houses who are at the outside looking in consider the May 14 polls as a low-risk event. I remember even one of them saying, “Wake me up when it’s over.”
However, such scenario doesn’t mean the opposition will be inutile and remain quiet. Remember, a Senate controlled by the opposition simply means that bills certified urgent by the President will be minutely scrutinized, and probably more so if they are tax measures which this administration has been giving much focus on.
So, will we be seeing a lameduck President going to the last three years of her term?
While she would seem able to withstand any new impeachment attempt, thereby holding on to finish her term until 2010, will she be able to pursue reforms that would push the country’s economic growth to higher levels?
Urgent measures
Even before the election dust settles, the finance department is already talking about certifying as urgent several revenue-enhancing measures, which it says are reforms that will shore up government finances. Of course, the DOF is also quick to dismiss these initiatives as new taxes in the pipeline.
First in the list is the fiscal incentives bill, which aims to rationalize (read: cut) current tax incentives and other perks provided to foreign investors. Fiscal incentives provided to investors hover at the P200- to P300-billion range on an annual basis, which would comprise a substantial portion of our P1 trillion budget.
Finance Secretary Teves feels that instead of unnecessarily giving out fiscal incentives as a means to encouraging investments into the country, providing businesses with non-fiscal incentives may prove to be a better ploy.
The non-fiscal perks we could give investors – and which they will probably appreciate more – are those that would support competitiveness, i.e., lower electricity rates, infrastructure support, low interest rate and a streamlined bureaucracy.
Of course, the assumption is that the incremental revenues that will be collected by scrapping existing fiscal incentives will be used to provide the above cited non-fiscal perks, more particularly for infrastructure and lower power cost.
Uniform income tax rates
Another measure to be endorsed to the new Congress is the simplified net income taxation system, or SNITS. This sounds, well, simple, and I certainly hope this is not a ploy to collect more taxes from us common people.
SNITS proposes a uniform income tax rate for individual taxpayers, while requiring companies to adopt a uniform tax deduction rate to cover their expenses, which currently are deducted from their taxable income. Being a “revenue-enhancing measure,” expect the end-table to translate to higher tax takes.
The two measures – the fiscal incentives and SNITS – are already being seen as bringing in P10 billion in additional revenues for the government.
New programs, higher rates
Third on the list is the fiscal responsibility bill. This may sound like some bureaucratic disciplinary measure, but could be quite alarming when closely scrutinized.
The proposal essentially requires government agencies to identify sources of revenues before a project or program is implemented. While the idea behind it is to improve fiscal finances, these could easily translate to new or higher fees or levies to financially justify such project or program.
Well, Teves keeps on saying that these aren’t new taxes, and are simply revenue-enhancing measures. Let’s see how these measures will finally evolve.
When is tax impost enough?
In the last three years or so, we saw our Congress churn out tax and economic laws. Remember the increased excise taxes on the so-called sin products or the special purpose vehicle law? Don’t forget the lateral attrition law, or the more crucial and painful value added tax law that increased VAT by 20 percent or the measure hiking corporate income taxes. All these additional tax impost were dumped into our laps with the promise of a better government fiscal position.
However, the poor revenue collection performance in the first quarter this year suggests that despite these higher taxes, the government may have failed to sustain the positive momentum earlier achieved. Probably it’s because agencies have relaxed a bit after an exemplary performance in 2006 or for other reasons that may be justified (such as a stronger peso, lower oil imports, frontloading of liquor and cigarette production, etc).
Does this failure mean they’ve got an excuse to punish the public again through new taxes? I hope this is not how the government thinks. In a way, it is perhaps a welcome relief that the election will hopefully alter synergies in Congress.
We certainly do not need new taxes now.
Challenging poker tournament enthusiasts
Philippine Poker Tour (PPT), the leading proponent of non-wager poker skills tournaments, is conducting satellite/qualifying tournaments nationwide to give local poker enthusiasts the opportunity to win FREE seats to the grand finals of the 3 rd PPT Million-Peso Hold’em Championship to be held on 7th and 8th July 2007. Each seat to the grand finals is worth P33,000 in tournament and registration fees.
PPT is conducting these satellite/qualifying tournaments in search of local talents who have the skill level worthy of international competitions as it continues to promote poker as a mind game.
Satellite/qualifying tournaments for the 3rd Philippine Poker Tour Million-Peso Hold’Em Championship resume at
Visit the official PPT website, www.PhilippinePokerTour.com for more details. Interested parties may also call the PPT secretariat (c/o Cindy) at 812-0153.
Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center,
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