By DAWN CECILIA PEÑA
MANILA – A labor group assailed the Department of Finance’s proposed tax reform for the new administration, saying the government apparently does not care on people’s welfare.
In a statement, Kilusang Mayo Uno secretary general Jerome Adonis said in Filipino, “We are still in a pandemic, millions lost their job and livelihood, and workers’ wages are still very low. If taxes are raised, how far will our depressing wages go? The government really does not care about the plight of the people.”
The finance department recently presented a fiscal consolidation and resource mobilization plan to the incoming administration, which it said is “critical” to helping the government continue its productive spending and stay afloat amid debts and future economic shocks.
“[The best way is] to raise more revenues and improve tax administration, and for the government to channel resources from unnecessary and non-priority expenses to productive spending,” said OIC Undersecretary and head of DOF Domestic Finance Group Valery Joy Brion.
Research group IBON Foundation, however, said that the proposed tax measures will be mainly borne by poor and ordinary Filipinos still recovering from the government’s excessive lockdowns and stingy subsidies.
“These additional taxes are largely consumption-based and will disproportionately burden low-income Filipinos,” it said.
The listed revenue-raising measures included higher personal income taxes, more goods and services to be covered by the value added tax (VAT), and more taxes on sweet drinks.
Rechannel government funds and tax the rich
Adonis further explained that instead of the additional tax, president-elect Ferdinand Marcos Jr. should be charged for his unpaid P203 billion ($3.8 billion) estate tax and the Marcos family be asked to return stolen wealth, for the country to pay its debt.
“It is also necessary to rechannel the NTF-ELCAC budget, which is useless and even more harmful due to their persistent red-tagging and disinformation. It is also time to tax the richest in the country,” he said.
Brion explained that the department is mindful of the impact of COVID-19 on Filipino households, thus proposed packages of measures that are “fair, that is, a broad-based tax system where all Filipinos contribute their fair share,” she said, adding, “[It is also] efficient, covering areas that should be taxed anyway and corrective, where revenue measures will result in improved social outcomes.”
Data from IBON Foundation’s computations from Credit Suisse Global Wealth Databook revealed that 2,919 Filipino billionaires are worth P8.1 trillion ($154 billion) or equivalent to 16 percent of the nation’s wealth.
“A tiny wealth tax on this will contribute P467.1 billion ($8.9 billion) to government revenues,” IBON said, if estimated total revenues generated from a wealth tax of 1 percent on wealth over P1 billion ($19.1 million), 2 percent over P2 billion ($38.2 million) and 3 percent over P3 billion ($57 million) are collected.
Debt incurred was not for COVID-19
Finance secretary Carlos Dominguez III said the larger deficit was a result of lower revenue collections due to, “reduced economic activity during the pandemic and the increased spending to protect lives, beef up the country’s healthcare capacity, procure vaccines, and provide subsidies to vulnerable sectors.”
The government also continued to implement its priority programs, Dominguez said, ‘Build, Build, Build’, the rollout of its distance learning program for public school learners, and risk allowances and free rides to medical frontliners.
However, Adonis said that President Duterte should be investigated with regards to the spending of the P12.68 trillion ($242 billion) national government debt.
“He said it went to the pandemic response, but the people did not feel a thing. It is also riddled with the issue of corruption,” Adonis added.
IBON Foundation belied government claims that public debt bloated due to its COVID-19 response.
“The government had P5.5 trillion ($105 billion) in gross borrowings from 2020 to 2021, but the Department of Budget and Management reported that total COVID-19 spending over the same period amounted to only P616 billion ($11 billion),” IBON said.
The group also noted that only a fraction of what DOF claimed, P1.3 trillion ($25.8 billion) for the pandemic response, actually went specifically to COVID-19 programs, “51 percent was ambiguous while 26 percent was not really for COVID-19.” (JJE, RTS)