{"id":15195,"date":"2025-08-20T03:45:34","date_gmt":"2025-08-20T01:45:34","guid":{"rendered":"https:\/\/wsj-crypto.com\/?p=15195"},"modified":"2025-08-20T03:45:34","modified_gmt":"2025-08-20T01:45:34","slug":"tax-increases-off-the-table-despite-soaring-national-debt","status":"publish","type":"post","link":"https:\/\/wsj-crypto.com\/index.php\/2025\/08\/20\/tax-increases-off-the-table-despite-soaring-national-debt\/","title":{"rendered":"Tax Increases Off the Table Despite Soaring National Debt"},"content":{"rendered":"\n

By Kenneth Christiane L. <\/b>Basilio, <\/b><\/span>Correspondent<\/i><\/p>\n

THE ADMINISTRATION will not <\/span>put forth new tax schemes in <\/span>the 20th<\/sup> Congress, Finance Secretary Ralph G. Recto stated, reiterating the government’s fiscal consolidation strategy despite unprecedented debt levels.<\/p>\n

Speaking to reporters after a Development Budget Coordination Committee briefing at the House of Representatives on <\/span>Monday night, Mr. Recto mentioned that the Marcos administration would concentrate on previously submitted measures such as an excise duty on single-use plastics and a tax amnesty initiative.<\/p>\n

When asked if the Department of Finance would support further tax proposals, Mr. Recto responded: \u201cNo.\u201d<\/p>\n

He also noted that the government was not contemplating raising current tax rates either.<\/p>\n

\u201cWe only have the single-use plastics remaining, that\u2019s number one,\u201d he stated. \u201cAlso possibly, a tax amnesty.\u201d<\/p>\n

Mr. Recto had previously emphasized that new revenue measures were unwarranted, referring to what he characterized in April as the nation’s \u201cstrong\u201d fiscal situation.<\/span><\/p>\n

Data from the government revealed that the Philippines\u2019 debt-to-gross domestic product ratio climbed to 63.1% as of the end of June, the highest since 2005. This figure remains above the 60% threshold that multilateral lenders consider manageable for developing nations.<\/p>\n

The debt ratio is anticipated to decline to 61.3% by the end of the year, although it still exceeds the earlier 60.4% target, according to a Finance department report.<\/p>\n

Outstanding debt reached a historic P17.27 trillion in June, an increase of 2.1% from the preceding month and 11.5% higher than a year earlier.<\/span><\/p>\n

The excise tax on single-use plastic bags was among the 28 priority bills highlighted by the Legislative-Executive Development Advisory Council. While it was passed by the House on third reading in 2022, the bill faced delays in the Senate Ways and Means Committee.<\/span><\/p>\n

The Finance department mentioned last year that the government could generate up to P33.8 billion from excise taxes on single-use plastic bags. <\/span><\/p>\n

Three proposals, aiming to implement a P100-per-kilogram excise tax on single-use plastic bags, have been reintroduced in the House. A corresponding Senate bill suggests a lower rate of P20 per kilogram.<\/span><\/p>\n

Mr. Recto in early August indicated that the government is also contemplating a tax amnesty which would involve a fee set at a yet-to-be-determined percentage of the unpaid tax, in return for protection from civil, criminal, and administrative penalties.<\/span><\/p>\n

Legislators in both the House and Senate are advocating for a general tax amnesty that would apply a 2% amnesty tax rate based on the total assets of taxpayers through 2024.<\/p>\n

The Finance department\u2019s decision to refrain from introducing new taxes is a \u201cpositive step\u201d as proposing new levies could suppress household expenditure, remarked Reinielle Matt M. Erece, an economist at Oikonomia Advisory and Research, Inc.<\/span><\/p>\n

\u201cAdditional taxes will significantly reduce households’ disposable income since more of their earnings will be allocated to taxes rather than consumption,\u201d he noted in a Viber message.<\/span><\/p>\n

\u201cFiscal consolidation is vital for better debt management and budget efficacy, but if it jeopardizes economic performance, it may be prudent to reassess the strategy to achieve this objective,\u201d he added.<\/span><\/p>\n

Although the proposed excise tax on single-use plastics and tax amnesty could enhance state revenues, the government should also focus on broadening the tax base and ensure that revenue avenues are \u201cfuture-proof,\u201d stated John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies.<\/span><\/p>\n

\u201cThese should be viewed as complementary rather than core measures,\u201d he mentioned in a Viber message. \u201cWhat we require is better tax administration, improved enforcement, and an expansion of existing tax measures.\u201d<\/span><\/p>\n

Mr. Rivera added that if the Finance department reverses its initial position, it should evaluate the impact on Filipino consumers and businesses. <\/span><\/p>\n

\u201cAny action must be weighed against inflation risks and its effects on consumers and businesses.\u201d<\/span><\/p>\n


\n
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By Kenneth Christiane L. Basilio, Correspondent THE ADMINISTRATION will not put forth new tax schemes in the 20th Congress, Finance Secretary Ralph G. Recto stated, reiterating the government’s fiscal consolidation strategy despite unprecedented debt levels. 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