PALACE  TO  PUSH  FOR  TAX  AMNESTY  BILL  DESPITE  IMF  DOUBTS

MANILA, November 23, 2004 (STAR) By Marvin Sy - Malacañang insists it would still push for the passage of the general tax amnesty measure even as the International Monetary Fund (IMF) claims it would not generate revenues for the cash-strapped government.

Presidential adviser for communications Silvestre Afable defended yesterday the proposed tax bill of the administration as having strong points even as he admitted it has disadvantages.

"There are definitely pros and cons but based on the evaluation of our revenue agencies, there would be more advantages, net advantages on tax collection," Afable said.

The IMF earlier rejected the measure — which forms part of the Philippines’ tax reform package — with IMF mission head Masahiko Takeda saying he did not see any benefits from its implementation.

The IMF recently concluded the latter of its two annual missions to the Philippines, wrapping up meetings with Philippine officials primarily to discuss the administration’s fiscal management plan, particularly its revenue generation program.

Takeda said the P80-billion package presented by Philippine officials is "sufficiently significant" but pointed out that the amnesty program is unnecessary.

Even the Department of Finance (DOF) sounded off on the proposed tax amnesty program, noting similar measures in the past did not help the government in its revenue generating efforts.

And within the administration, officials are at loggerheads over how to implement the amnesty program amid loud and aggressive lobbying by business interest groups, particularly the Filipino-Chinese community.

The DOF said that target delinquent individuals and businesses do not actually avail themselves of the program.

The IMF already slammed the idea of a tax amnesty program in its post-program monitoring report, saying government should resist proposals for new tax amnesties "given the harmful impact that repeated amnesties have on incentives for taxpayer compliance."

"The IMF is generally cautious about amnesties and our recommendation was based on this basic caution," the IMF said.

Despite the reservations of the DOF, Malacañang certified the proposed tax amnesty bill as an urgent measure in 2003 as the Arroyo administration added more sweeteners into its re-election bid for the May 2004 presidential elections.


Reported by: Sol Jose Vanzi

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