House Ways and Means Chair Albay Rep. Joey Sarte Salceda said President Ferdinand Marcos Jr has “many fiscal options to enable the country’s rapid growth,” among them, to quickly mobilize at least “P180 billion in non-tax sources that are not in the Budget of Expenditures and Sources of Funding (BESF).”
Speaking at the first Tax Symposium of the accounting giant SGV, Salceda said “there are funds available” for the President to deploy, “to fight inflation, take the first steps towards food security, and protect the country’s economic recovery.”
Salceda pointed out that “at least P180 billion in non-tax sources that are not in the BESF can be mobilized quickly, among them equity withdrawals from government financial institutions after the purpose of such infusions had lapsed under Bayanihan 2.
President Marcos, he said, can also draw from the “discontinuance of undistributed unconditional cash transfers from the TRAIN [Tax Reform for Acceleration and Inclusion] Law, the sale of bunked gas from the Malampaya field to the Ilijan Power Plant, and the privatization of the now-defunct Legazpi Domestic Airport.
“PBMM can also undertake a cash sweep similar to what PRRD did in 2019, the privatization of casinos under PAGCOR, and the streamlining and re-nationalization of approvals for reclamation projects,” he added.
Salceda said that “Public-Private Partnerships [are] likely to make resurgence, as PBBM directed legislation of new PPP framework,” and the Bangko Sentral ng Pilipinas can increase its dividends to the National Government, due to realized revaluation gains on foreign currency assets, as the peso’s value hit near-record-lows this year.
“I think some P16.2 billion in realized gains on foreign currency appreciation have been made by the BSP from March to July alone,” Salceda, an economist, said, adding, however, that new taxes still need to be imposed, to support an aggressive national infrastructure program, which is still the best form of public investment.
“Our tax make-up is also still heavily on income, at around 53% of total internal revenue take. We need to increase our share of tax revenues from taxes on bad habits,” like pre-mixed alcoholic beverages, gambling, mining, and other areas which are now in the agenda of the House tax committee, he explained.
Salceda also said the House is already discussing its ways forward in “ensuring that the Philippines receives its just share of taxes from global transactions, citing the effects digitalization and cross-border transactions that have made it harder for traditional tax policies to collect revenues.
He said his committee has already formed a working group with the Department of Finance to study imposing a “minimum income tax” of 15% on the “book income” of corporations.
“This will ensure that companies with large discrepancies between their income as reported to shareholders and their income as reported to tax authorities, will be imposed a baseline tax. Highly profitable companies (that do not need the tax incentives, hence high book income even before these deductions), will pay significant taxes,” he further explained.
Salceda said the committee will continue to pursue policies to control tax base erosion and profit shifting schemes, or schemes by multinational corporations to reduce their tax liabilities by shifting around their costs among related parties.
“The Committee will push on efforts to get the country’s fair share of taxes from digital and cross-border transactions where at least one party is a Philippine resident,” Salceda assured.
The Tax panel, he said, will provide fiscal space for “Marcosian-sized” public investment program, which will make sure the President has enough fiscal space to pursue a more ambitious public investment program.
“We need big visions from President Marcos. His surname evokes largeness. Marcosian means massive. Things like a bridge from Matnog to Allen, from Guimaras to Iloilo, from Mindanao to Leyte. Of course, the larger the vision, the larger the fiscal space needed. My committee will do its best to give him that need,” Salceda added.