Senator Joel Villanueva on Friday cautioned the Duterte administration’s economic managers against tying the hands of legislators, so to speak, with proposed budget parameters leveraged on the proposed tax reform package.
This developed during the legislative hearing Wednesday conducted with the Development Budget Coordinating Committee (DBCC).
Based on projections presented by the economic managers, the government expects to collect around PhP413 billion additional revenue for 2018, which also corresponds to the estimated increase in tax collection for the same year.
“This suggests that 99.9% of the projected increase in our revenues for next year will be sourced from the additional taxes that we expect to collect,” Villanueva observed.
The P413 billion increase for 2018 represents an 18.3% growth in taxes, marking a historical jump since 2006, when taxes rose by 20% following reform measures legislated in 2005.
“This represents the biggest nominal jump in tax collection in our country’s history,” the senator added.
Meanwhile, he elaborated, the 2018 projected disbursement, at P3.36 trillion, translates to a jump of P455 billion from this year’s programmed disbursement at P2.9 trillion.
“So, you have P413 billion increase in revenue sourced from additional taxes and P455 billion increase in spending for 2018. Does this mean that almost 90% of the additional funds we expect to spend next year will be funded from the additional taxes we expect to collect?” Villanueva asked.
In response, Budget Secretary Benjamin Diokno said that the “balance will be collected from tax administration reforms and the buoyancy effect from higher GDP growth, assuming GDP grows by the anticipated 7 percent.
The senator said he wanted to make sure the Executive department “is not trying to get ahead of Congress” in a way that, in effect, puts pressure on Congress to pass the proposed TRAIN (Tax Reform for Acceleration and Inclusion Act) in toto since it appears the national budget depends on it.