RP to trim tax facility

RP to trim tax facility

Philippine Finance Secretary Jose Isidro Camacho has ordered the trimming of tax exemptions and incentives granted by government agencies in an effort to bolster the government's sagging revenues, it was announced here Sunday.

The incentives and exemptions, granted to attract prospective investors to this country, is "an issue we have to deal with," Camacho was quoted as saying.

All agencies will be asked to harmonize their tax incentives, the department said, adding that the internal revenue bureau would tighten its controls as well.

The department did not say how much was being lost to these incentives and exemptions although some estimates have placed it at about 4.2 billion pesos (US$82.4 million) a year.

The International Monetary Fund (IMF) last week warned that the Philippines must rein in its budget deficit to achieve its projected growth targets for this year.

The Philippines is targeting a budget deficit of 130 billion pesos for 2002 but the deficit has already soared to 82.9 billion pesos in the four months to April alone.

Government officials have attributed this to poor revenue collections and accelerated spending in the first months of the year. -- AFP