Government Plans to Focus on Cutting Spending and Improving Revenue Collection Efficiency
The Finance Secretary, Ralph Recto, announced that there will be no new taxes imposed during the remaining years of the Marcos administration. Instead, the government will prioritize cutting unnecessary spending and enhancing revenue collection efficiency to strengthen its fiscal health.
Recto emphasized that the fiscal situation of the government is not dire enough to warrant new taxes. However, he acknowledged that improving revenue generation would require time, particularly in adapting to the challenges posed by the growing e-commerce sector.
He highlighted the need to enhance tax collection efficiency, especially in the realm of e-commerce where revenue collection is increasingly challenging. Recto reiterated that the administration’s last resort should always be to increase taxes, emphasizing that the debt-to-GDP ratio is at 60 percent and is projected to decrease in the coming years.
To bridge the budget deficit, the Marcos administration plans to borrow a total of P2.46 trillion from domestic and international creditors in 2024. Additionally, the Department of Finance, under Recto’s leadership, is advocating for the passage of priority tax measures in Congress to boost revenues and address fiscal gaps.
Recto clarified that his decision to refrain from imposing new taxes is not influenced by his political aspirations and emphasized that he may not even run for public office in 2028. As a veteran lawmaker, Recto has been involved in key tax reforms in the past and is focusing on implementing measures to increase revenue generation efficiency.
Overall, the government is looking into reducing nonessential expenditures, exploring fee and charge adjustments, and maximizing nontax revenues from various sources to improve fiscal health and sustainability.
