Supplemental budget to be passed if Congress approves all tax measures, says Diokno

Budget Secretary Benjamin Diokno floated the possibility of having a supplemental budget for 2018 to offset the budget cuts of several agencies.

Diokno, however, said that the executive branch will only be amenable for a supplemental budget if Congress will pass all the remaining tax reform packages this year.

"There is a talk of a supplemental budget because there is pressure from lawmakers to add funds to offset what we cut from inefficient government agencies in the 2019 budget," the Budget chief said during a breakfast forum in Manila on Wednesday.

The Cabinet official said the Department of Budget and Management (DBM) slashed the 2019 allocation for the Basic Educational Facilities Fund (BEFF) to P34.742 billion from P105.461 billion in 2018 due to inefficiency of utilization of funds.

The DBM also cut the 2019 appropriations for the Health Facilities Programs to P50 million from P30 billion allocation in 2018 due to “negative findings of the COA (Commission on Audit)."

"The supplemental budget is a possibility but not a certainty since it requires that the executive identifies source of financing," Diokno said.

The potential revenue from the remaining tax reform packages pending in Congress may be tapped as source for the supplemental budget, he said.

"So if Congress will agree to pass all our tax measures, then there’s a possibility," the Budget chief said.

Senate and House of Representatives versions of the second package of the government's tax reform program are now pending for discussions. The second packages aims to reduce corporate income tax rate and rationalize fiscal incentives.

The DOF on Sunday said it has submitted the remaining packages of the planned tax reform to Congress, which it hopes would be passed into law by the end of the year.

The three additional packages submitted to Congress include the following:

• Package 2+: Proposal to increase the excise tax on tobacco and alcohol products and increase the government's share from mining;
• Package 3: Proposal to reform property taxation to make the valuation system "more equitable, efficient, and transparent"; and
• Package 4: Proposal to rationalize capital income taxation to address the multiple rates and different tax treatments and exemptions on capital income and other financial instruments.

TRAIN1B, which contains the proposed tax amnesty program and adjustments in the Motor vehicle Users Charge (MVUC), is also pending before Congress. — RSJ, GMA News