Finance Secretary Benjamin Diokno said the Marcos administration’s funding package would ensure the achievement of his eight-point socio-economic agenda.
Appearing before the Senate Finance Committee chaired by Senator Juan Edgardo “Sonny” M. Angara to support the proposed 5.268 trillion peso 2023 national budget, Diokno said a strict exercise in fiscal prudence had helped affirm the rating of record credit despite global downgrades.
Diokno, former chairman of Bangko Sentral ng Pilipinas (BSP), said tax revenue in 2021 increased by 5.2% and exceeded the annual program approved by the Development Budget Coordination Committee (DBCC) by 4.3%. ).
Additionally, collections from January to August 2022 showed growth of 18.1% over the same period in 2021 and exceeded the DBCC-approved schedule at 7.1%.
Earlier, Diokno cited growing investor confidence, with foreign direct investment (FDI) inflows from the Philippines reaching a record USD 10.5 billion in 2021. For the first half of 2022, FDI inflows increased by 3.1% YoY to $4.6. billion.
With the economy successfully reopening and robust economic activity, the unemployment rate in July was recorded at 5.2% – the lowest since the pandemic hit, he said.
The proposed budget for 2023 for the Ministry of Finance (DOF) and its attached agencies is a proposed budget of 30.6 billion pesos for 2023.
In his budget presentation, Diokno said the agency’s proposed budget included an allocation of some 4 billion pesos for the modernization initiatives of the Internal Revenue Office and the Customs Office.
Senator Francis “Tol” N. Tolentino asked Diokno, “What is the current status of the CBDC (Central Bank Digital Currency) now? May we know from the Secretary of Finance, during your tenure as Governor of Bangko Sentral, what happened after these announcements? Diokno said that based on studies completed by the DOF on the matter, transitioning to the CBDC “at this time would not be helpful” as current digital payment systems such that Pesonet and Instapay “work very well” and are proven to be reliable for online payments in the country.
Senator Robinhood C. Padilla asked Diokno if the DOF would collect taxes from online sellers and suggested the agency define categories based on the income of small online entrepreneurs.
“Is it true that you are going to tax online sellers?… I guess there should be certain categories, especially for small online sellers? Padilla said in Filipino.
In response, Diokno admitted that there was a proposal to tax online sellers based on the Value Added Tax Act and in fairness to brick-and-mortar sellers who paid their taxes to the government.
Senator Raffy Tulfo requested clarification on the tax system from the Bureau of Internal Revenue (BIR).
He cited BIR’s proposal to tax pedicab drivers, vendors, sari-sari shops and vloggers and asked why the agency is targeting small entrepreneurs rather than big corporations like oil companies.
In response, Bureau of Internal Revenue (BIR) Commissioner Lilia Guillermo denied that the BIR targets small business owners. She said the basic principle of taxation is to be “fair and equitable” and the agency’s focus is on all taxpayers.
At the end of the budget hearing, Angara announced that his committee would present the DOF budget for budget deliberations on the 2023 draft national budget when the Senate plenary session resumes next month.
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