For presidential bets, no new taxes

a text message: “No, we will not impose new taxes. Instead, we will be able to increase fiscal resources by addressing corruption and by improving tax compliance and tax administration.”

In addressing corruption, Ms. Poe’s administration will ensure transparency in government transactions by working on the passage of the Freedom of Information Bill and allowing citizen participation in the audit of public services.

The senator further plans to eliminate “unnecessary” tax exemptions, enforce the Customs Modernization and Tariff Act, reintroduce fuel marking to increase detection of oil smuggling and replace quotas or quantitative restrictions on rice imports with tariffs, among others.

On behalf of Mr. Duterte, spokesperson Peter Tiu Laviña said: “The mayor has said he will propose to exempt those receiving monthly income of P20,000 from income tax. We may need to offset this with new sources.”

Mr. Duterte, however, believes “we will have enough money for priority programs” without imposing new taxes “if we can stop smuggling, corruption and government waste,” Mr. Laviña said, adding that the mayor will consult experts on this issue.

For his part, former Finance secretary Margarito “Gary” B. Teves — a consultant of Mr. Binay — replied: “no, the vice-president will focus on generating additional revenues from a menu of options” that includes rationalizing fiscal incentives, indexing the excise tax on gasoline to inflation and continuously improving tax collection efficiency by simplifying filing requirements for small taxpayers, among others.

Mr. Binay will also consider the sale of select state assets and corporations, a stronger crackdown on smuggling as well as improvement in value-added tax ( VAT) payments by reviewing exemptions and accelerating refunds.

Liberal Party spokesman Barry Gutierrez, meanwhile, said Mr. Roxas would consider “definitely not new taxes” in expanding the government’s revenue base.

“Mar will, in fact, work immediately for lower income taxes, particularly for low- middle income earners. But higher revenues can be expected from improved tax collection and a continuously robust economy, especially with more new jobs.”

Ms. Defensor- Santiago did not outrightly address the issue of new taxes, outlining in a statement, instead, a tax reform agenda aimed at updating the country’s tax system in sync with those of competitors in Southeast Asia and making it administratively simple, fairer, responsive and high-yielding. She also plans to reduce the maximum personal income tax rate to 25% from 32% as well as the corporate income tax rate to 25% from 30%.

To offset the foregone revenues, Ms. Defensor- Santiago plans to rationalize fiscal incentives, impose a national real property tax, abolish the estate tax whose administrative cost is supposedly higher than its yield and raise taxes on consumption by gradually increasing the VAT rate to 15% from 12% by 2019.

“Cutting red tape at the local government level will be my top priority. Well- performing local government units will be rewarded with additional intergovernmental grants,” she said.

Pending the fiscal strategy of the new administration that will assume office at noon of June 30, the interagency Development Budget Coordination Committee targets by 2019 to raise the government’s revenue effort to 18.8% of gross domestic product ( GDP) from 15.9% in 2015 and cap the budget deficit at 2% of GDP, according to NBM 126. “This policy will allow the government to spend more on expenditure priorities to a high of 20.9% of GDP by 2019 and, at the same time, reduce the impact of the fiscal deficit on long-term debt levels. Accordingly, the country’s debt profile is expected to decline further from 44.8% of GDP in 2015 to 35.5% of GDP by 2019.”

The government — largely through the Bureau of Internal Revenue ( BIR) and Bureau of Customs (BoC) — aims to raise P3.04 trillion in 2017 alone. This will cover an expenditure program capped by the Department of Budget and Management at P3.35 trillion or 12% more than 2016’s P3.002 trillion.

Under President Benigno S.C. Aquino III, the government’s main collecting agencies have consistently missed their annual revenue targets. In 2015, for instance, the government collected a total of P2.109 trillion in revenues. This increased 11% from the previous year’s P1.909 trillion but fell 8% short of the P2.275-trillion target. Total tax effort during the year barely moved to 13.7% from 13.6%. The BIR’s collection rose 7% to P1.433 trillion, but settled 14% below the P1.674-trillion target. The BoC raked in P367.53 billion, which declined 0.6% from 2014 and missed 16% of the P436.6-billion goal.

Budget Secretary Florencio B. Abad said via text that the new administration will not necessarily have to implement new taxes or increase existing rates. “There is still a lot of room for improving revenue collections through administrative tightening. Aggressively, we need to pursue some policy measures that will also significantly increase revenues.”

But he warned against populist, revenue-eroding measures.

“One source of confidence of our creditors and the investing public in our ability to sustain our growth trajectory is our commitment to fiscal consolidation, a key component of which is protecting and sustaining our revenue flows,” Mr. Abad said.

“If you erode that with populist measures and abandon fiscal responsibility, it will also erode the confidence of our creditors and investors in our ability to sustain our reforms.”

Remrick E. Patagan, research director of the Institute for Development and Econometric Analysis, Inc., noted that “most of the candidates’ populist proposals should be taken with grain of salt and may or may not actually be implemented.”

“Current proposals to reduce income taxes, for instance, must be accompanied by measures to compensate for revenue losses. But some of these compensating measures such as a hike in VAT rates and coverage will weigh heavily on the poor rather than the middle and upper classes.”

Bank of the Philippine Islands Research Officer Nicholas Antonio T. Mapa, meanwhile, said “I have no qualms with new taxes or increased tax rates for as long as we see effective spending by the government to improve basic services for the public.”

Mr. Mapa noted the Aquino administration did not need new taxes because it seemed “not in any mood to spend” in the first place.

“I would actually support a candidate who would ensure that he posts wider deficits for as long as he or she ramps up spending and improves the level and quality of government services across the board,” Mr. Mapa said.

“The private sector has done more than its share to bear the brunt of our economic resurgence and it’s high time that the government gives back to us,” he noted.

“GDP numbers have received a substantial boost from car sales, real estate purchases and air travel and yet we still get stuck in the same flooded crowded streets and still subject to airport fees that don’t even ensure that we will have our airports powered.”