FINANCE CHIEF: NEW TAXES UNAVOIDABLE FOR NEXT GOVERNMENT
MANILA, FEBRUARY 19, 2010 (STAR) By Iris Gonzales - Finance Secretary Margarito Teves said yesterday that the next administration should implement new taxes because the country’s fragile fiscal position would worsen without fresh revenues.
“How is it possible for the next administration to be able to handle the requirements with a very low revenue base? I’m not sure it’s possible,” Teves said.
He said the government is running out of assets to sell, and the only way to raise revenues is through additional taxes.
The government recorded a budget deficit of P298.5 billion for 2009, a 338.3 percent rise from the P68.1 billion deficit recorded for 2008.
Teves advised the next administration to impose new taxes during its first 100 days or the so-called “honeymoon period.”
He said President Arroyo approved the reformed value added tax (RVAT) law or Republic Act 9337 during the first 100 days of her administration.
The RVAT law, passed in 2005, raised the sales tax on goods and services to 12 percent from 10 percent and lifted exemptions on oil and petroleum products despite strong opposition from consumers and cause-oriented groups.
RA 9337 also raised the minimum corporate income tax to 35 percent from 32 percent, but this was reduced to 30 percent last year.
In 2008, the government raised P121.14 billion from the RVAT law, P32.21 billion higher than P88.93 billion collected in 2007.
Last month, Liberal Party standard-bearer Sen. Benigno “Noynoy” Aquino III told members of the Makati Business Club that he would not impose new taxes or raise tax rates if elected president. Instead, he said he would address revenue leakages.
Nacionalista Party presidential candidate Sen. Manuel Villar, on the other hand, said he cannot promise there would be no new taxes under his administration.
Chief News Editor: Sol Jose Vanzi
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