REALITY bites. That is the realization of President Marcos, who called on Congress, to prioritize the passage of new tax measures to generate more funds for the government’s mega infrastructure projects and other programs aimed at resurrecting the economy that is still reeling from the effects of the COVID-19 pandemic.
In this space last week, I was wondering whether PBBM will limit his choices for his “top priority bills” from the list of 20 in the Common Legislative Agenda (CLA) which, by the way, did not contain any new tax proposals at all.
And I asked, will the President make any surprises at his State of the Nation Address (SONA)? He did.
Despite his campaign promise not to impose new taxes that would hurt the poor, the President urged the legislators last Monday to pass not only one but four, yes… four new tax laws.
These are the Excise tax on single-use plastics, the VAT on digital services, the Rationalization of mining fiscal regime, and the Motor vehicle user’s charge/road user’s tax- (MVRUT) – the same proposals floated by his economic managers a few weeks earlier.
Based on the initial estimates, the MVRUT and the mining tax would raise P15.8 billion and P12.4 billion for the government coffers, respectively, by 2025, once passed into laws. The President, however, left out the two other measures that are jointly pushed by the Department of Finance (DOF) and the Department of Health (DOH): the higher duties on junk food and increments in the sweetened beverage tax that are seen to generate at least P76 billion in additional revenues.
Bakit kaya? The President’s change of heart (or mind) would have come from his understanding that despite the government’s improving revenue generation and collection system, the current financial standing would not be enough to sustain state expenses. The funding of some 194 high-impact infrastructure flagship projects (IFPs) alone is worth P9 trillion under the administration’s Build Better More (BBM) program.
This is why, PBBM must renege on his “no to new taxes” position when campaigning for the presidency. Well… as the expression says: “Promises are like pie crust; they are made to be broken.” The people will have to swallow this “bitter bill” if Congress gives in to the imposition of higher taxes. But there is still hope for ordinary folks like you and me. The 2025 mid-term national election is fast approaching and our elected officials, for sure, will be mindful of the voters’ sentiments or they will suffer the consequences of their actions on voting day. Even if the proposed tax laws could easily be passed by the House of Representatives, they will face intense scrutiny when it reaches the Senate floor.
Senator Chiz Escudero, who earlier said that he will- if necessary- personally ask PBBM to “press the pause button” on higher taxes, opined that these proposals “may even be blocked (in the Upper Chamber) if they will cause misery to an already overtaxed people.”
