Govt may gain P200-B from non-tax reforms

The Philippine government stands to gain more than P200 billion if it would seriously consider including non-tax reforms, a civil society organization said over the weekend. Code: Reforms for Economic Development (Code: RED) said in a statement that the government could add P200 billion to its purse by amending the Tariff and Customs Code and the provision on Internal Revenue Allotment (IRA) in Local Government Code. Code: RED said that around P100 billion to P174.2 billion of revenues are lost due to smuggling. If the government would amend the Tariff and Customs Code, the measure can act as an anti-smuggling mechanism to provide advance transmission and publication of cargo manifests, Code: Red pointed out. The amendments, it said, can also include the implementation of spot checks and periodic audits of customs bonded warehouse and encourage private sector participate in valuation issues. Code: RED said that through amendments of IRA, local government units (LGUs) must be empowered in terms of revenue mobilization efforts. As cited by a Congressional Planning and Budget Department study, the IRA must be reformulated to include poverty-sensitive indicators. This, Code: RED said, will address the uneven level of developments among LGUs. The amendments to the IRA can address inequality between urban and rural LGUs in terms of development and economic growth. The IRA provision amendment would correct the mismatch in the distribution of revenue sources and costs of devolved functions, it added. The Aquino administration must also put a cap on the passage of tax-eroding measures, Code: Red said. The group said that more than P80 billion was estimated to be lost from tax-eroding measures enacted in the 14th Congress. These laws include the individual income tax relief (RA 9504), corporate income tax reduction (RA 9337), abolition of documentray stamp tax on secondary trading stocks (RA 9468), tourism incentives (RA 9593), Personal Equity and Retirement Account (RA 9505), Real Estate and Investment Trust (RA 9856), and Bataan and Aurora Freeport Zones (RA 9728 and RA 10083, respectively), among many others. Tax-eroding measures could place more pressure on the deficit as well as hamper economic growth which would erode the country's competitiveness, said Code: Red. "We are also recommending the prudent and efficient allocation of resources in the annual national budget. The national government and legislators must adhere to sustainable fiscal policy and clear set of strategic sectoral priorities to effectively link policy priorities and long-term spending plans, improve expenditure allocation and control, and ensure predictability of funds for priority programs and projects," the group said. —JE/OMG, GMANews.TV