Government Of Philippines Warned Not To Dilute Tax Reforms

by Mary Swire, for LawAndTax-News.com, Hong Kong

07 December 2004

In an open letter to the Philippine Senate published in the national media on Monday, several of the country's former finance and economic officials warned the government against watering down its proposed tax reforms in response to corporate lobbying.

The communication, signed by former finance secretaries Vicente Jayme, Jesus Estanislao, Roberto de Ocampo, and Ernest Leung, as well as former economic planning chief Solita Monsod, observed that:

"Indeed, the fiscal crisis is serious, and we fully concur with the government's sense of urgency of the need for quick and decisive action. However, the government must not miss this opportunity to correct serious weaknesses in the tax system made endemic through inefficiencies in legislation, administration and compliance."

The former government officials also expressed concern at the recent approval by the House of Represenatives of a diluted version of the planned excise tax bill, which sets substantially lower target tax increases for tobacco and alcoholic drinks than had previously been proposed.

Urging the introduction within six years of a flat PHP13.50 tax per pack of cigarettes, the finance officials concluded in their letter that:

"Viewed against the backdrop of present circumstances, the final form of the sin taxes bill will define either what we have become, or what we should be - a people that has lost its sense of direction or one that has decided where it should go."

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