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Money Market Association of the Philippines Fiscal Management Turnover in 2010

Money Market Association of the Philippines Fiscal Management Turnover in 2010. Hotel Intercon 15 April 2010. Margarito B. Teves Secretary Department of Finance. Improving tax effort. Tax Revenues (in billion pesos) and Tax Revenues / GDP (in percent) 2001 – 2010.

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Money Market Association of the Philippines Fiscal Management Turnover in 2010

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  1. Money Market Association of the Philippines Fiscal Management Turnover in 2010 Hotel Intercon 15 April 2010 Margarito B. Teves Secretary Department of Finance

  2. Improving tax effort Tax Revenues (in billion pesos) and Tax Revenues / GDP (in percent) 2001 – 2010

  3. Reducing debt burden

  4. Pursuing capital market reforms • Personal Equity and Retirement Account (PERA) Law • Amendments to the Philippine Deposit Insurance Corp. (PDIC) Charter to increase the maximum deposit insurance coverage • Pre-Need Code • Reduction in the premium tax on life insurance

  5. Containing 2010 Deficit to Manageable Level

  6. January-February 2010 Fiscal Performance

  7. Key Challenges: Declining revenue base Total Revenues (in billion pesos) and Total Revenues / GDP (in percent) 2001 – 2010

  8. Estimated Impact of Revenue Eroding Measures on 2010 Fiscal Program

  9. Key Challenges: • Structural weaknesses in tax system. Exacerbated by the series of revenue eroding measures which renders taxation more prone to compliance risks and deterioration in collection efficiency. • Increased pressure on the deficit. Sustain expenditures for reconstruction efforts and infrastructure to help put recovery on a more solid footing. • Continuing threats to growth. Continue to monitor developments that may affect our growth prospects • El Niño • Imminent power shortages • Volatile commodity price movements

  10. Keeping on track with the fiscal program… • Further strengthen the implementation of more effective tax administration measures • Intensify collection of non-tax revenues including contributions from GOCCs and GFIs as well privatization proceeds • Tighten implementing rules and regulations of recently enacted revenue eroding measures to avoid leakages and curb abuse • Be proactive and work together with the academe, the business sector and the international financial institutions in preparing tax reform strategy

  11. Improve tax effort Tax Revenues (in billion pesos) and Tax Revenues / GDP (in percent) 2001 – 2010

  12. 2010 NG Financing Program: Continued reliance on Domestic Borrowings

  13. Remain Focused on Reducing Debt Burden

  14. Urgent Tasks for the Next Administration • Sustain the revenue performance of the BIR and BOC through the continued vigorous implementation of their action plans

  15. Urgent Tasks for the Next Administration • Pursue the privatization of government assets that are best left to private hands.

  16. Urgent Tasks for the Next Administration Revenue Eroding Measures Revenue Enhancing Measures Support the passage of revenue enhancement measures that will replace every peso lost from the revenue-eroding measures, and restore the gains from past fiscal reforms to spearhead fiscal consolidation.

  17. Revenue enhancement measures • Rationalize the fiscal incentives • Review VAT exemptions • Simplify net income taxation • Restructure excise taxes on sin products and implement automatic indexation • Rationalize taxation in the financial sector to level the playing field

  18. Revenue enhancement measures • Increase VAT rate with corresponding reduction in the corporate and income tax • Audit revenues, not just disbursements

  19. “Eternal vigilance is the price of democracy.” ~Wendell Phillips

  20. Money Market Association of the Philippines Fiscal Management Turnover in 2010 Hotel Intercon 15 April 2010 Margarito B. Teves Secretary Department of Finance

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