MANILA, Philippines - The Congressional Planning and Budget Department, the think-tank of the House of Representatives, urged Congressmen to pass the three revenue measures being pushed by the government.
In its yearend report to lawmakers, the CPBD said passing the measures that would raise taxes on alcohol and cigarettes, rationalize fiscal incentives and re-impose the simplified net income taxation system would help the government address a widening fiscal gap.
The CPDB said Congress should also refrain from passing measures that would give additional fiscal perks.
“To avert the worsening fiscal situation, instead of passing additional tax perks, it is recommended that Congress seriously take into consideration the (three) revenue-enhancement measures,” CPBD director-general Rodolfo Vicerra said in the report.
The CPDB report said the simplifiation of the excise tax on alcohol and tobacco products has a potential revenue of P19 to P21 billion in the first year of implementation and P60 to P70 billion on the fourth year.
The think-tank lamented that until now, the measure is still pending at the House Committee on Ways and Means.
Another measure which CPBD said would help boost state coffers is the measure seeking the re-imposition of the simplified net income taxation system.
CPBD said the measure, which could generate P5.24-billion revenues, is still pending in the Senate since December 2008.
Finally, the Congressional think-tank said, the measure seeking to rationalize fiscal incentives also remains pending in Congress.
This, it said, could generate savings of at least P10 billion if the provision on a phased-out income tax holiday would be adopted and that the government would have a performance-based, focused and uniformly-applied fiscal incentives to local and foreign investors.
The Department of Finance, however, believes that the three measures it has been lobbying for would not be approved by Congress anytime soon.
Finance Secretary Margarito Teves said the more realistic assumption is that the three crucial measures would take effect in 2011 because lawmakers usually do not act on revenue measures during election season.
“The best time to pass revenue measures would be between July 2010 to June 30, 2011,” the Finance chief noted, adding that it would be the time that there is a new administration and Congress is expected to support it.