No new taxes if elected - Noynoy

MANILA, Philippines - Liberal Party standard-bearer Sen. Benigno “Noynoy” Aquino III yesterday promised businessmen that once he is elected as president, there would be no tax increases or new taxes.

Speaking in a forum sponsored by the Makati Business Club (MBC), Aquino also said he would give them a “level playing field” free of cronyism, and likewise vowed to streamline the approval process for new enterprises as well as regular business transactions with the government.

Aquino topped a December survey by the MBC with an approval rating of 61 percent, followed by administration standard-bearer Gilbert Teodoro with 14 percent. Nacionalista Patry presidential candidate Sen. Manuel Villar Jr. followed with seven percent; Sen. Richard Gordon with three percent, and former President Joseph Estrada with one percent. Fourteen percent of the respondents were undecided.

Aquino said the next president is inheriting a government with a bloating deficit which has already reached P272.5 billion, 4.1 percent of the gross domestic product (GDP).

“In addressing the looming fiscal crisis, good governance and the drive against corruption are critical components in our strategy. We will refrain from imposing new taxes or increasing tax rates,” Aquino said.

“I strongly believe that we can collect more taxes at the BIR (Bureau of Internal Revenue) and higher duties at Customs if we become more serious in curbing and punishing tax evasion and smuggling. The BIR’s collection dropped by 5.5 percent, while that of Customs declined by 16.6 percent. This is the first time in recent history that absolute revenues have actually declined,” he said.

Aquino said his administration will recapture a good part of the revenue leaks by going after smugglers and tax evaders.

“In this effort, we will not be starting from zero. Be assured that those smugglers and evaders are not faceless and unknown entities,” he said.

Aquino said the easing of the tax burden will enable businesses to expand and create more jobs.

“I believe that markets are better than government in spotting where the growth opportunities are, and, with universal low tax rates, we will encourage entrepreneurs and enterprises to invest and create jobs in any industry. We will, therefore, pursue the rationalization of fiscal incentives early in my administration,” he added.

Aquino said he targets to grow the country’s revenue base by raising the tax effort to at least 15 percent from the current 13 percent. The country’s tax-to-GDP ratio peaked at 17 percent during the Ramos administration.

“If we can only bring this back even to just the 15 percent level, that will translate to P150 billion in additional revenues, which would make a significant dent in cutting our deficit,” he said.

“My budget team estimates that for 2009 alone, around P280 billion of our national budget was lost to corruption. If we take the years 2002 to 2009, the total estimates exceed one trillion. Estimates vary, but everyone agrees that the numbers are huge,” he added.

Along with addressing tax issues, Aquino also promised “fair competition” in the business sector amid widespread perception that success in Philippine business depends on special ties to the government.

He said this system has hindered players from performing in the global market where “special relationships” do not apply.

“Because of this, some players in the industry are forced to focus their activities on maintaining relationships in order to retain favors... This has fostered the wrong kind of competitiveness. While it may work locally, for now, it has not enabled these players to become competitive in the world market where the rules of the game do not take special relationships into consideration,” he said.          – With Dino Maragay