MANILA, Philippines - Nacionalista Party (NP) standard-bearer Manuel Villar Jr. vowed yesterday to crack the whip on the country’s revenue agencies as well as strengthen local governments’ tax collection powers – if he is elected president – to address the country’s runaway budget deficit.
Villar said the government’s P298.5-billion deficit last year, which was P48.5 billion over the target, threatens to dampen economic growth in the next two years unless adequate measures are put in place.
“The next administration needs to boost the efficiency of the Bureaus of Internal Revenue and Customs. Our commitment is to improve tax administration, simplify taxation for small businesses and the self-employed, and rationalize fiscal incentives,” Villar said.
“At the same time, we need to ensure that the revenue-raising powers of local government units are adequate and robust to finance public services. Healthy LGUs will take some of the pressure off the national government,” he added.
Villar acknowledged that stimulus spending and reconstruction costs for damage caused by typhoons last year had inflated the deficit.
But he explained that a prudent fiscal administration through improved collection must be put in place if the government wants to cut the deficit to manageable levels in the next two years.
“Creating new taxes will always be a last resort in addressing the deficit problem. Our priority will be to improve collection efficiency and be very prudent in our fiscal affairs,” he said. “We need to perk up the countryside economy by empowering LGUs in revenue generation to allow them to make growth-inducing investments.”
Villar said a thin tax base and complex tax structure are hampering collection efforts.
“We will zero in on structural defects and move quickly to boost efficiency,” he said.
Earlier, Finance Secretary Margarito Teves blamed the staggering deficit on new laws cutting taxes and on government’s failure to sell big-ticket assets.
But Villar said the situation is not hopeless.
“As a former businessman and entrepreneur, I understand how big deficits can stunt economic growth. It will take good governance and strong political will to execute measures needed to address the deficit problem,” he stressed.
“We will need to work closely with Congress and other branches of government,” he said
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