Aquino admin urged to look into non-tax measures to raise funds

MANILA, Philippines - The Aquino administration should look into other non-tax reform measures to help boost state coffers amid the government’s fragile fiscal position, according to Code: Reforms for Economic Development or Code Red, a non- government organization.

The group listed down other possible non-tax reform measures which it wants the government to do instead of passing bills like those involving fiscal responsibility and rationalizing fiscal incentives.

Code Red, for instance, recommended amendments to the Tariff and Customs Code.

Data showed that some P100 billion to P174.2 billion worth of revenues are lost to smuggling, the group said.

“Amending the Code will serve as anti-smuggling mechanism as it can provide for advance transmission and publication of cargo manifests and bill of landing to the Bureau of Customs and Philippine Ports Authority; conduct spot checks and periodic audits of customs bonded warehouse; and encourage private sector participation in valuation issues. The amendment will also serve as one of Revised Kyoto Convention’s enabling laws,” it said.

The group also recommended amendments to how the internal revenue allotment or the IRA is disbursed. The local government units (LGUs) must be empowered in terms of revenue mobilization efforts. As cited by a Congressional Planning and Budget Department study, the IRA must be reformulated to include poverty-sensitive indicators.  

“This way, the uneven level of developments among LGUs can be addressed. Moreover, reformulating the IRA can narrow fiscal disparities between urban and rural LGUs, and correct the mismatch in the distribution of revenue sources and costs of devolved functions,” it said.

Moreover, the group said the Aquino government must consider putting a cap on the passage of tax-eroding measures.  

More than P80 billion has been estimated to be lost from tax-eroding measures enacted in the 14th Congress. These measures are: individual income tax relief (RA 9504), corporate income tax reduction (RA 9337), abolition of DST on secondary trading stocks (RA 9468), tourism incentives (RA 9593), Personal Equity and Retirement Account (RA 9505), Real Estate and Investment Trust (RA 9856) and Bataan and Aurora Freeport Zones (RA 9728 and RA 10083, respectively), among others.

Code Red is also recommending the prudent and efficient allocation of resources in the annual national budget.