Finance Secretary Benjamin Diokno underscored the importance of broadening the tax base to boost the National Government’s revenue collection and ease the tax burden on Filipinos.
“When you have a broader [tax] base, pwede kang magbaba ng tax rate kasi ang revenue is rate times base. Kung malawak ang base mo, marami tayong nagbabayad, we can afford to reduce the [tax] rate,” said Secretary Diokno on Monday, October 3, at the Senate Committee on Finance hearing of the proposed Fiscal Year (FY) 2023 budget of the Department of Finance (DOF).
(When you have a broader [tax] base, you can reduce the tax rate because revenue is rate times base. If you have a broad base – meaning there are more taxpayers – we can afford to reduce the [tax] rate.)
Among the DOF’s priority measures to broaden the tax base and enhance the fairness of the tax system is the imposition of value-added tax on digital goods and services.
Senator Juan Edgardo “Sonny” M. Angara said that the committee will favorably recommend the DOF’s proposed P30.6 billion budget for FY 2023 to the plenary.
P25.7 billion will fund the operations of the DOF and eight of its attached agencies, including the Bureau of Internal Revenue (BIR), Bureau of Customs (BOC), Bureau of the Treasury (BTr), Bureau of Local Government Finance (BLGF), National Tax Research Center (NTRC), Privatization Management Office (PMO), Central Board of Assessment Appeals (CBAA), and Insurance Commission (IC).
The other P4.6 billion will be used as budgetary support to Government-Owned or -Controlled Corporations (GOCCs) that are chaired by the DOF, which are: the Philippine Tax Academy (PTA) and the Philippine Crop Insurance Corporation (PCIC).
The DOF is also proposing a total of P210 million for the refund of the service development fee for the government’s Nampeidai property in Tokyo, Japan.
The DOF has allocated a total of P4 billion for digitalization and modernization initiatives of the BIR and BOC.
Key expenditure items include the upgrading of the agencies’ ICT machinery and equipment, subscription to cybersecurity tools, enhancement of electronic tax payment facilities, and other critical assets.
In his opening statement, Secretary Diokno presented the accomplishments of the DOF from 2021 to 2022.
He said that the DOF has managed to spend 95 percent of its 2021 budget according to its programmed allotment for the said year.
Meanwhile, for the first half of 2022, the DOF has already obligated 79 percent of its current budget.
National Treasurer Rosalia V. De Leon, BIR Commissioner Lilia C. Guillermo, BOC Commissioner Yogi Filemon L. Ruiz, BLGF OIC-Executive Director Ma. Pamela P. Quizon, NTRC Executive Director Marlene Lucero-Calubag, IC Commissioner Dennis Funa, Philippine Crop Insurance Corporation President Jovy Bernabe, Philippine Tax Academy President Gil Beltran, and PMO Chief Privatization Officer Maan Vanessa L. Doctor were also present to address the concerns of the committee.
###
