The Department of Finance (DOF) will seek the help of the World Bank (WB) and the International Monetary Fund (IMF) for its plan to restructure the country’s excise tax system, with the end goal of simplifying it.
Finance Secretary Margarito Teves said the DOF will start an inventory of various sin tax proposals in Congress.
“We will make an inventory of various sin tax proposals in Congress and Congress will need some inputs from us then we are ready to provide those inputs on those bills,” Teves said.
The DOF is eyeing to restructure the country’s excise tax system amid concerns raised by international health institutions that the prevailing system is not raising enough revenues for government and is not discouraging the use of cigarettes and alcohol.
Teves said the government is seeking the help of the IMF and WB for information on what is the practice in other countries.
“We are also asking help from other institutions like IMF and WB to provide us more info about how this is practiced in other countries. The information may be useful,” Teves said, adding that some countries may be indexing the adjustment of sin taxes on inflation. Teves said the end goal is to simplify tax administration.
“When taxes are simpler, it is easier to administer then it is easier to collect,” he said. Teves had formally conveyed his request to IMF and WB officials during the recent World Economic Forum in Davos, Switzerland.