Filipino Finance Secretary Seeks Introduction Of New Tax Laws

by Mary Swire, Tax-News.com, Hong Kong

17 November 2008

November is looking set to be a challenging month for the country's new chief of the Bureau of Internal Revenue, Sixto Esquivias, who faces a number of problems, especially in the area of improving tax collection to meet government revenue targets.

Finance Secretary Margarito B. Teves has however put pressure on Congress to pass three new tax laws which he says will significantly increase government revenues.

If the laws gain approval, then the country will see changes in three key areas of taxation:

• business taxes will be re-shaped under the introduction of a Simplified Net Income Taxation Scheme (SNIPS);
• taxes currently levied on luxury items such as alcohol and cigarettes will be changed; and
• fiscal incentives will be rationalized

Teves argues that these changes are needed to boost the government's tax take so that it can increase public spending and ward off a recession.

It is hoped that if Congress gives the proposals the green light, they will generate somewhere between PHP20bn and PHP30bn (USD405m and USD607m) in additional revenue for the government on an annual basis.

Teves may succeed in at least one area of his quest, as late last month the Department of Finance also submitted plans to Congress concerning the simplification of the excise tax collection method which currently applies to tobacco products.

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