Home » Top Stories » Lower pop’n growth, more infra spending, investments needed to reduce poverty — Sec. Dominguez

Lower pop’n growth, more infra spending, investments needed to reduce poverty — Sec. Dominguez

by: August 2, 2016 8:17 pm Category: Top Stories A+ / A-

DAVAO CITY (MindaNews/02 August) – The government needs to increase spending on public infrastructure, check population growth, and encourage more investments to generate jobs in order to lower the 26-percent poverty incidence rate to 17 percent at the end of Duterte administration, Finance secretary Carlos Dominguez said Tuesday.

Dominguez said this requires the Bureau of Internal Revenue to be more efficient in its collection of taxes so that government will have more funds for public infrastructure.

“We need help and encouragement from the BIR to our taxpayers so that we become a more investment-friendly country. So there are many other things that I hope in that area that the men and women at the BIR can think how they can contribute to the reduction of poverty in this country,” he said in a statement Tuesday.

He said he objected to increasing the value added tax (VAT) to 14 percent to offset the income and corporate tax cuts that President Rodrigo Duterte promised during his State of the Nation Address.

“I am inclined against that proposal. By some estimates we could double VAT collections simply by being more efficient in collecting it,” he said.

Dominguez acknowledged that more challenging years await for BIR as the Duterte administration is bent on cutting tax rates for individual and corporate taxpayers.

“This is necessary to improve our people’s purchasing power and to make our companies more competitive,” he said.

But he added that government can compensate for the lower tax rates by rapidly broadening the tax base and improving VAT collection efficiency.

To increase the tax collections, he suggested to the BIR to reorganize the Large Taxpayers Unit of the bureau that is responsible for the bulk of collections.

“I cannot imagine that we only have 2,800 so-called ‘large taxpayers’. The numbers should at least be double that,” he said.

The Finance secretary saw the need to grow the country’s revenues faster.

“The current tax efforts among our neighbors run as high as 17%. The last time we reached that, I think the first and the last time we reached that, was under the leadership of Commissioner Chato, and I think we should congratulate her for that. We should challenge Commissioner Dulay to reach and improve that record,” he said.

He pointed out the need to hire more younger workers as a major program at the BIR.

“I understand that your average age in the BIR is somewhere around 47 years old. I think we should bring that down to probably 35, have big efforts towards hiring young, well-educated college graduates. I think it should be a major program,” he said. (Antonio L. Colina IV/MindaNews)

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