Neri says 2006 budget ‘realistic’

The Department of Budget and Management (DBM) said yesterday the administration’s proposed P1.05 trillion 2006 national budget was realistic, given the expected revenues from the expanded value-added tax (EVAT) and improved collections by revenue-generating agencies.

Several senators questioned the budget submitted by the DBM, saying they could not see where the funds would come from except new debts the government would incur.

But DBM Secretary Romulo Neri said the government was expecting P78 billion in revenues from the EVAT alone once the implementation of the amended tax measure is allowed by the Supreme Court.

The SC suspended the EVAT implementation after opposition congressmen filed a petition saying it was unconstitutional. The high court is expected to issue a decision on the law by the end of August.

Neri also said Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC) had been tasked to work vigorously to increase collections and prosecute tax evaders.

Senators Manuel Villar, Mar Roxas and Sergio Osmeña III said the proposed 2006 budget was unrealistic, given the economic and fiscal condition of the country.

Villar said the budget proposal was disjointed because the macroeconomic assumptions used by the DBM were far from the actual figures of a gross national product (GNP) growth rate of 4.7 percent, a gross domestic product (GDP) growth rate of 4.6 percent and an 8.5-percent inflation rate.

The assumptions used by government agencies based on the DBM memorandum were: GNP, 6.5 percent to 7.5 percent; GDP, 6.3 percent to 7.3 percent; inflation rate, four to five percent; and a foreign exchange rate of P55-P57 to $1.

Roxas and Osmeña said the revenue agencies’ collections, even with the implementation of the EVAT, would not be enough to fund the proposed trillion-peso budget. — Aurea Calica