PASSAGE OF 8 TAX MEASURES TO RESULT IN BALANCED BUDGET BY 2009 - DOF
MANILA, January 11, 2005 (STAR) By Ted P. Torres - The national budget could attain a balanced position by 2009 if all the eight recommended tax measures are passed into law this year, Finance Secretary Juanita Amatong told a press briefing yesterday.
Aside from the proposed tax measures, Amatong said the National Government (NG) should likewise surpass its revenue collection figures year after year.
The country’s targeted budget gap for 2004 was set at P197 billion while the programmed deficit this year has been set at P186 billion.
New revenue measures by the Bureau of Internal Revenue (BIR) are also expected to generate a 14 percent increase in collections by 2010, if accompanied by the legislated tax measures, Amatong said.
Of the proposed measures, the new tax structure on cigarettes and liquor, otherwise known as "sin taxes," has been passed into law. As of presstime, the lateral attrition measure or the performance-driven system on collecting agencies like the Bureau of Customs (BOC) and the BIR, is being scheduled for discussion with Congress’ bicameral committee but is expected to be signed into law within the week.
Among the other tax measures are the two-tiered value-added tax (VAT), the gross income tax system over the existing net income; windfall tax on telecommunications income; granting of general amnesty with submission of statement of assets, liabilities and net worth; and the rationalization of fiscal incentives.
Committee hearings on the VAT are already being scheduled by Congress although it would still take sometime as discussions will be divided between the incentive and the two-tiered hike.
The Finance Department added that to attain a balanced budget, the NG must also manage expenditures and debts, while reducing the deficit of government-owned and —controlled corporations (GOCCs).
Likewise, government must institute measures to improve the performance of the official development assistance (ODA) utilization and expand public capital formation.
Amatong pointed out that the much-delayed fixed income exchange (FIX) for the development of the country’s capital markets will enter into a significant phase "within the week."
"The disagreements will be settled within the week," Amatong said without explaining details. Sources said that a host of issues, especially tax matters, remain unresolved which has caused the delay over the past two years.
The establishment of the FIX is viewed by the financial markets as among one of the solutions for new foreign funds as well as development of funding sources for local corporates and the small and medium enterprise (SME) market.
Reported by: Sol Jose Vanzi
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