THE Department of Finance’s (DOF) first responsibility is to help deliver an economy that works to improve people’s lives, and to do this it will need to carry out bold and creative measures, including reforming tax and customs management to ensure sufficient revenues.
This was the message of Finance Secretary Carlos Dominguez 3rd during the formal DOF turnover ceremony held at the Bureau of the Treasury on Friday.
“The Department of Finance can no longer use its fancy calculations to continue its detachment from the everyday lives and everyday Filipinos. We need to do our job a little differently, a little more creatively,” he said. “The DOF’s first responsibility is to help deliver an economy that works for the people’s betterment.”
“If we can raise taxes and feed all our people at the same instant, that will be the best of all worlds. If we cannot, then let us feed our people first.
“We need to quickly adjust our tax rates to bring them closer to reality. Our people expect that. It will also be good for business.
“The DOF is charged with defining fiscal policy. We must ensure sufficient revenue flow to look after the social protection needs of our people,” Dominguez said.
“We have to make sure the prosperity of this country… has to be shared by the majority.
That is not as easy to do as it is to say because, obviously, we have to lower some taxes eventually by reviewing and readjusting the tax tables and be more realistic to correct that for inflation as well as the task of spending more money,” he explained.
The DOF plans to submit its proposals on tax adjustments to Congress by September.
“You know, we cannot adjust the revenue [target]unless it is passed by Congress, so the adjustments will be on the spending side and will focus on the spending priorities of the Duterte administration, which is to bring up infrastructure spending to 5 percent of GDP [gross domestic product]and spending it more on infrastructure budgets in areas outside of Metro Manila,” Dominguez said.
Dominguez also mentioned that there will be adjustments in the corporate tax as well but a lot of things have to be reviewed first.
“Our corporate tax rate is the highest in the region and yet it seems that we collect the lowest corporate income tax amount in the region. I guess [that is]because we also have a lot of exemptions,” he said.
‘Dramatic’ changes in BIR, BOC
The Cabinet official also said dramatic changes in the government’s two main revenue agencies–the Bureau of Internal Revenue and the Bureau of Customs–are also needed.
These changes have to do with simplification of procedures, improved automation and enhanced trade facilitation, he said. “Doing these things will reduce corruption and enable us to serve our clients better.”
More importantly, Dominguez stressed that improving efficiency in these revenue agencies will enhance the growth prospects of the economy.
“These may be very broad strokes but I feel therein lies the essence of the challenges ahead. We were elected to office to bring progress for all. We must never lose sight of that,” he said.
“These are, to be sure, very general marching orders. I am confident the DOF has the talent and the commitment to eventually flesh out these general points and deliver a government capable of empathy,” he added.