Lawmaker seeks moratorium on revenue-eroding bills

MANILA, Philippines -  Quezon City Rep. Winston Castelo echoed yesterday the appeal of Finance Secretary Cesar Purisima for Congress to desist from approving measures that erode government revenues.

He said the House of Representatives and the Senate should impose a moratorium on such measures.

“The government cannot afford to lose much-needed revenue on account of proposed laws that have negative revenue impact,” he said.

He said the two chambers should learn their lesson from their approval of at least seven bills that are now depriving the government of billions in additional income.

He identified these as the Real Estate Investment Trust Law, the law providing for VAT (value added tax) exemption on selected goods and services purchased by senior citizens, the law restructuring the documentary stamp tax, the law on the reduction of premium tax on insurance policies, the Migrant Workers and Overseas Filipino Act which abolished the documentary stamp tax on overseas Filipinos, the law which exempted local water district from income taxes, and the law which created special economic and free port zones.

Castelo said the government is losing at least P112 billion a year from these revenue-eroding laws, money that could have been used to improve vital public services.

He said while Congress approved these measures, it failed to pass any bill that would increase existing tax rates or impose new taxes.

It was in effect a double whammy for Purisima and his tax collection personnel, he added.

However, he pointed out that faced with such a situation, the Finance chief and his tax collectors are doing a good job of increasing government revenues.

Complemented by prudent spending, the result is an improvement in the country’s finances, which has not gone unnoticed by credit rating agencies, which have improved their credit outlook for the country, he stressed.    

Castelo said he is looking forward to the day when Congress would consider reform measures that would result in additional revenues.

President Aquino has included the proposed restructuring of “sin” taxes – those on alcohol and tobacco products – among the priorities he would like his allies in Congress to work on.