A summary of possible new measures now under consideration shows that the government would be able to generate an average of P2.5 to P3 billion from various administrative and legislative tax measures pending approval by various government agencies.
The tax measures under consideration include a redefinition of automobiles for excise tax purposes, a redefinition of gross income for income taxation of companies located in special economic zones and setting a 50-percent cap on representation expense as allowable deduction for income tax purposes.
The proposed cap will limit the amount that corporations will be allowed to deduct from their gross income to determine the taxable income. From this measure, the government hopes to generate additional revenues of P2.3 billion. The government also intended to amend the existing revenue regulation to address what is perceives as an inequity in the taxation of automobiles which, at present, is based on total seating capacity. From this redefinition, the government calculates that it can collect an additional P5.5 billion.
The government is also thinking of redefining the gross income for income taxation of companies located at the Subic Freeport and other special economic zones. This would contribute P2.6 billion more.
The list also includes the fringe benefits tax and the tax on foreign currency deposit units (FCDUs) under the Comprehensive Tax Reform Program. Although the potential collection in 2000 was estimated at P2.6 billion, the government said it only collected P269 million from the fringe benefit tax and P255 million out of the estimated P1.8 billion from the FCDU tax.
The government said the Bureau of Internal Revenue needs to fully and correctly implement the FBT and FCDU tax in order to generate an additional P2.56 billion.
The total revenue impact of pending legislative measures was initially estimated to be at least P2.48 billion, pending the final estimates of the revenues to be collected from the restructuring of the excise tax on automobiles which would base the tax on the price or value of the car instead or using the existing classification by engine displacement and fuel type.
Government is also waiting for Congress to approve the proposed law that would impose a minimum on gross receipts for common carriers tax on land, air and water transport.
Earlier, the Department of Finance estimated that it would generate an additional P80 billion this year, about P21 billion was to come from new administrative measures and improved collection by the Bureau of Internal Revenue (BIR).