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July 21, 2024

Taxpayers key to outgrowing the country’s government sector debt

Finance Secretary Carlos Dominguez on Thursday cited areas that should help keep the Philippines on a sustainable growth path and cast aside the hardships made worse by the ongoing pandemic.

The areas include investing more in infrastructure, social services and climate action that he said are “doable” objectives with the support of the nation’s taxpayers.

In all three, he said, the most critical part is played by taxpayers and for this reason urged the population to honor its civic duty and pay the tax due the government.

Dominguez said the new generation of entrepreneurs and emerging businesses in the new economy should remember their duty “to ensure that our country moves forward through the prompt and correct payment of taxes.”

At Thursday’s kickoff of the Bureau of Internal Revenue’s (BIR) tax campaign, he emphasized the critical role played by taxpayers in helping ensure the country’s rapid and sustainable economic recovery.

The BIR, he said, must continue making progress in its digital transformation programs and encouraged all taxpayers to make use of electronic channels to file and pay their taxes this year.

According to him, the reforms began by the Duterte administration helped transform the Philippines into one of the fastest-growing economies in Asia, resulting to historic low unemployment and underemployment rates and a country poised to attain upper-middle-income status by 2020 before the pandemic struck.

But he said COVID-19 was merely a temporary setback that the Philippines was able to overcome owing to the tax reforms and enhanced tax administration that helped it gain the financial strength to weather the worst of the crisis.

As a result of the unexpected costs of COVID-19 and lower revenues, the country’s budget deficit and debt-to-GDP (gross domestic product) ratio temporarily expanded but at a manageable level.

He gave assurance the government has already formulated a program to limit the deficit and improve the debt-to-GDP ratio as part of the fiscal consolidation plan that will be turned over to the next administration.

Essential to this fiscal consolidation program is the improvement of revenue collections to meet the government’s expenditure requirements, Dominguez said.

“This year will be critical. We need to begin outgrowing our debt by restoring our high growth. To lead our strategy for quick recovery, we need to spend more on infrastructure modernization. We must invest more in our public health system and social services. We have to continue procuring vaccines for our people. We need to rebuild the communities damaged by severe weather events caused by climate change,” Dominguez said.