TEVES SAYS GOVT MAY SELL ASSETS TO ADDRESS TAX SHORTFALL
MANILA, July 19, 2005 (STAR) (AP) - The Philippines' new finance secretary said Monday he was considering selling non-performing government assets and stocks to address a revenue shortfall triggered by the Supreme Court's suspension of the expanded value added tax.
"Our immediate priority is to make sure we address the government's collection shortfall," Margarito Teves said after being sworn in by President Gloria Macapagal Arroyo.
He said if the July 1 temporary restraining order on the expanded VAT lingers, "we also have to come up with alternatives" in raising revenues.
Teves raised the possibility of disposing of non-performing government assets and stocks as well as increasing dividends that government financing institutions turn over to the national treasury to mitigate the impact of lower tax collection.
On July 1, the Supreme Court froze the implementation of the VAT expansion, which opponents claim is unconstitutional because lawmakers didn't approve it.
Supreme Court spokesman Ismael Khan said Monday the court is likely to resolve the case soon, with a decision expected by the first week of August and not later than Aug. 15.
Former Finance Secretary Cesar Purisima, who resigned July 8 amid vote-rigging allegations against President Gloria Macapagal Arroyo, had warned that without the VAT, the country's debt would continue to rise, risking a repeat of a 1984-85 crisis, when gross domestic product plunged to minus 5 percent and the unemployment rate jumped to 13 percent.
In May, Arroyo's administration decided to increase the number of products and services subject to the 10 percent tax to include petroleum products, electric power, airline and shipping fares. Arroyo has made the tax the centerpiece of her economic reform policy.
Purisima earlier estimated the temporary suspension of the VAT law will cost the government up to 5 billion pesos (US$54 million) a month.
Teves vows to seek alternatives to EVAT The Philippine Star 07/19/2005
Where there’s a will, there’s a way.
Newly appointed Finance Secretary Margarito Teves vowed yesterday to look for alternatives to the expanded value-added tax to address the government’s revenue shortfall caused by the suspension of the EVAT’s implementation.
Teves also said he is considering selling non-performing government assets and stocks to address a revenue shortfall triggered by the Supreme Court’s suspension of EVAT.
"Our immediate priority is to make sure we address the government’s collection shortfall," Teves said after being sworn in by President Arroyo.
He said if the July 1 temporary restraining order on the tax lingers, "we also have to come up with alternatives" in raising revenues.
Teves took his oath of office before Mrs. Arroyo along with new Budget Secretary Romulo Neri in simple ceremonies in Malacañang.
Teves replaces resigned secretary Cesar Purisima, who had accused the Arroyo government of having a hand in the issuance of the TRO.
The new finance secretary was president and chief executive officer of the Land Bank of the Philippines prior to his appointment to head one of the most difficult portfolios in government.
Supreme Court spokesman Ismael Khan said Monday the court is likely to resolve the case soon, with a decision expected by the first week of August and not later than Aug. 15. — Aurea Calica, AP
Reported by: Sol Jose Vanzi
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