Lacson: No need for new tax packages to pay P12-T debt

Presidential aspirant and Senator Panfilo Lacson on Wednesday said there is no need for the government to impose new tax measures to pay for the country's P12-trillion debt.

During the Go Negosyo-One News' "Kandidatalks" series, the lawmaker explained that revenues from the 12% Value Added Tax (VAT) alone are sufficient to clear the government debts.

However, Lacson said this could only be realized if the tax exemptions would be reduced. He recalled his suggestion to officials of the Department of Finance to reduce the lines of exemption on VAT during one of the briefings for then-Tax Reform for Acceleration and Inclusion (TRAIN) bill.

"Ang una kong bungad sa kanila: Imagine if there is no leakage sa ating VAT at wala tayong lines of exemptions, zero, as in zero. So, ibaba natin ng 10 percent ‘yung VAT, kung mayroon tayong P17 trillion na nominal GDP, easily sa VAT pa lang mayroon tayong 1.7 trillion," he said.

(What I told them is, 'Imagine if there is no leakage to our VAT and we zero lines of exemptions. We could bring it down to 10 percent and collect P17 trillion nominal Gross Domestic Product. With the VAT collection alone, we could get P17 trillion.)

After raising this suggestion, Lacson said they came up with a computation where the VAT rate is set at 10% and the lines of exemption are reduced.

"So, nagkasundo kami noon, nagbawas kami and for VAT alone, at 10 percent, not 12 percent, makakalikom tayo... ng P117 billion kaagad. VAT pa lang puwera pa ‘yung mga ibang naka-package. Hindi natin kailangan ng additional taxes sa tingin ko," he said.

(We have agreed that we will reduce the VAT and it will be set at 10 percent, not 12 percent. With that computation we will collect P117 billion for VAT alone. This doesn't include other packages. I think we don't need additional taxes.)

His amendment to the then-TRAIN bill was however outvoted, Lacson lamented.

Lacson earlier suggested a review of the VAT law to generate funds for the government subsidy program amid the spike in fuel prices.

Under the Duterte administration, the government introduced new tax measures such as the TRAIN Law and the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law. Both are part of the government's  Comprehensive Tax Reform Program.

Apart from the revision of the VAT Law, Lacson reiterated the need for his budget reform program to pay off the country's debt. He mentioned anew the need to "cut off the fat" or remove the non-essentials and balance the national budget.

"Only a balanced budget can actually reduce yung ating [our] dependence sa debt, sa pangungutang. Lalo ngayon dahil sa invasion ng Russia sa Ukraine, yung mga creditors natin nagtataas na sila ng interest rates kaya malungkot," he said.

(Especially now, because of the invasion of Russia in Ukraine, our creditors have increased the interest rates.)

From 2010 to 2020, Lacson noted that there is an average of P328 billion unused funds from the national budget.

"So, kung hindi natin nagagamit eh baka hindi kailangan yon, 'di ba? Hindi pa natin nasasama yung usapin ng misused at saka yung abused na appropriations, yung naipa-pocket," he added.

(So if we are not using it, maybe we don't need it, right? That amount excludes the misused funds and the abused appropriations or the funds which were pocketed by some individuals.) —KBK, GMA News