Finance Secretary Carlos Dominguez III on Tuesday said the Department of Finance (DOF) said they are finalizing the proposed and improved tax hike that would repay the Philippines’ increasing debt.
Dominguez said the collected revenues from the said proposal would give the country resources to pay for its COVID-19 debts.
“We are just putting the final touches on our fiscal consolidation plan, and we are not… At this point I don’t have a complete package but certainly, looking realistically at our situation, we have to pay for COVID,” Dominguez said before the Financial Executives Institute of the Philippines (FINEX).
“I mean, we cannot just have COVID and not pay for it okay. You don’t know how much we spent in just paying for the vaccines,” he added.
DOF’s latest data showed that as of January 14, 2022, the Philippines had raised a total of $22.55 billion in budgetary support financing.
Agreements with the Asian Development Bank, the World Bank, the Asian Infrastructure Investment Bank, the Agence Française de Développement, the Japan International Cooperation Agency, the Bank of Korea Economic Development Co-operation Fund, and global bonds denominated in foreign currencies are included.
Tax hike to pay PH’s COVID-19 debts – Department of Finance
“Again I tell you, doing tax reform, doing any reform requires a lot of planning and a lot of strategic thinking. You cannot just go there and start waving a banner and say, ‘Oh, we’ll do this, we’ll do that,’ you can’t do it,” Dominguez said Tuesday.
“You have to sit down, think about it, think who your enemies are, think who your friends are, and hopefully your enemies make mistakes and that you don’t,” he continued.
The Tax Reform for Acceleration and Inclusion (TRAIN) and the Corporate Recovery and Tax Incentives for Enterprises (CREATE) were passed during President Rodrigo Duterte’s term and under the leadership of Dominguez.
“Reforming the tax system in this country required a lot of confidence, and it was a confidence building exercise,” Dominguez said.
As of February 2022, the outstanding debt of the Philippines grew by 20 percent to P11.73 trillion in 2021 from P9.8 trillion in 2020, according to the Bureau of the Treasury (BTr).
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