Purisima vows to go after tax evaders

MANILA, Philippines - True to the promises of President Aquino that his government would raise revenues by improving tax administration and not through new taxes, newly appointed Finance Secretary Cesar Purisima vowed yesterday to go after tax evaders, however big their names may be.

“We will not discriminate in terms of height, weight, age, dimension…There will be no discrimination to it. It will be implemented across the board,” he said on his plans to fight tax evasion.

He also said the new economic team would review the macroeconomic assumptions set by the previous administration, including the possibility of scrapping the goal to balance the budget by 2013.

“What is important is to keep it at a manageable level,” he said in a turnover ceremony yesterday.

On his first day on the job, Purisima laid down his plans as head of the finance portfolio, a job he also held in 2005 as part of the Arroyo administration.

Purisima said that everything would be up for review, including the recommendations of his predecessor, former Finance Secretary Margarito Teves.

Teves recommended increasing the value added tax (VAT) to 15 percent from the current 12 percent, rationalizing tax incentives and raising taxes on alcohol and cigarettes.

However, echoing the position of President Aquino, Purisima said that before he would push for new taxes, he would first look into the revenue loopholes.

“Before we consider those things, we have to plug the holes in our tax pail first,” he noted.

In the area of privatization, Purisima said he would also put on hold the sale of such items until after the new administration does a thorough review of the state-owned assets lined up for privatization.

The previous administration had planned but failed to sell the Food Terminal Inc. (FTI) property in Taguig for P9 to P10 billion, the government’s stake in Philippine National Oil Company-Exploration Corp. (PNOC-EC) for P17 billion and the lease and development contract of its real estate property in Fujimi, Japan for around P3 billion.

Proceeds from the privatization of state-owned assets would be used to fund investments that would generate jobs and not mainly to plug a widening budget deficit, Purisima said.

Purisima, who was appointed trade secretary in 2004 and finance secretary in 2005, had come from the private sector, one of the country’s biggest auditing firms, Sycip, Gorres & Velayo.

Angara urges gov’t to include tax-related measures to boost revenues

Sen. Edgardo Angara has joined the calls for President Aquino to include a number of tax-related measures to his effort to improve tax administration as a way to generate more revenues for the government.

Speaking at a weekly forum at the Senate, Angara noted that the policy of the President to plug the leaks in the Bureau of Internal Revenue and Bureau of Customs is the right thing to do.

However, he argued that taxation is something that cannot be avoided in order to sustain the growth of the economy.

“He will concentrate first on plugging the loopholes and in improving tax collection which, I think, is the right thing to do,” Angara said.

Angara cited the need to review the excise tax on tobacco and alcohol or the sin taxes as well as the law rationalizing fiscal incentives.

According to the Department of Finance, excise tax reforms for tobacco, alcohol and petroleum could generate as much as P40 billion in revenues for the government.

For the rationalization of fiscal incentives, the DOF expects to raise an additional P10 billion.

“I think we have freely and liberally given out incentives over the past several decades and no one has really looked at the whole range of tax incentives whether they are obsolete, they are out of date, or they are unnecessary,” Angara said on the rationalization of fiscal incentives.

“Some probably did not even serve the purpose of attracting investments the incentives were originally intended. So to me, on Day 1, (Finance Secretary Cesar) Purisima should already have a review of all possibilities, including sin taxes, taxes on luxury items and incentive rationalization,” he added.

President Aquino has been against imposing new taxes or raising taxes as a way to generate revenues.

Instead he wants to go after tax evaders and smugglers to come up with the necessary revenues. – With Marvin Sy