Department of Finance (DOF) Secretary Ralph Recto said tax revenues need to grow by 10.2 percent annually from 2025 to 2028 to ensure that the country has a reliable revenue stream.
In a statement Thursday, Recto said the over 10 percent growth would push total revenues to hit nearly PHP6 trillion by the end of President Ferdinand R. Marcos Jr.’s term.
By 2030, he said total revenues would breach the PHP7 trillion mark.
Recto said that in the medium term, revenue collections would be bolstered by increased administrative efficiency from the Bureau of Internal Revenue and Bureau of Customs, through continuous modernization and digitalization, non-tax revenues, the proposed General Tax Amnesty, and the extension of the Estate Tax Amnesty.
Last year, the DOF including its attached agencies collected PHP4.42 trillion in revenues to support the government’s PHP5.925 trillion expenditure.
These revenues funded, among others, the education for 24.54 million public school students, provided medical assistance to approximately 6.4 million patients in public hospitals, and supported PHP871.38 billion in local government funding.
Recto said that for this year, the DOF is tasked to collect PHP13.65 billion a day in revenues and plugging the PHP4.51 billion deficit per day to support the PHP18.61 billion daily spending of the government.
As the nation’s needs continue to grow, Recto reiterated that proposals to lower the value-added tax (VAT) rate will lead to massive revenue losses, resulting in less public services, and may force the government to borrow even for basic operations, such as personnel salaries.
He said the entire VAT collection for 2025, which is estimated to reach PHP1.39 trillion, can only fund nine months’ worth of payroll, premium, and pension of active and retired government workers.
Recto said the PHP576 billion in total excise tax collections would not be enough to fund the combined PHP965-billion budget for basic, tertiary and technical-vocational education programs.
Several bills filed in both chambers of Congress are pushing for the reduction of VAT to ease the burden of consumers amid rising prices. (PNA)