NEDA chief reiterates need to pass tax measures amid loans to finance COVID-19 response

April 22, 2020

Acting National Economic and Development Authority (NEDA) Director General Karl Kendrick Chua reiterated on Wednesday the need to pass all the tax measures to finance all social services being implemented and loans that the government has been incurring as the country faces the coronavirus disease crisis.

"I believe that the comprehensive tax reform should be pushed through, but maybe there will be a bit addition or changes to help those affected by COVID," Chua said in the "Laging Handa" virtual briefing.

The Philippine Chamber of Commerce and Industry has urged the government to defer the passage of some tax measures, which call for the removal of some incentives to foreign investors.

PCCI President Benedict  Yujuico said with the deferment, the Philippines could attract foreign investors, especially those leaving China.

"Our tax system really needs to be changed because of the so many problems, very complicated, not fair, and very inefficient. So once this COVID-19 crisis is over, we and the Department of Finance will study it (PCCI proposal)," Chua said.

He said NEDA will give its input to determine the economic impact of every policy.

However, he maintained the need to pass the comprehensive tax reform, which is composed of several tax measures, including the proposed Corporate Income Tax and Incentives Rationalization Act.

"If we are not going to pass the tax reforms, that means, with so many people that need to be assisted, with so many services that we need to provide, we have to borrow," he said.

He explained that the loans are not free and which need to be paid by the people also.

"That's why our decision, whether to borrow money or to raise taxes, we need to study which is the best balance," Chua added.

The Philippine government has borrowed from the Asian Development Bank, World Bank and Asian Infrastructure Investment Bank to fund its response to COVID-19 crisis.

Chua also said the government has other sources of revenue, such as savings by the government and dividends from the government-owned or controlled corporations.

"But our tax system still really needs to be changed because if not, we cannot see a simpler, fairer and better tax system," he said.

Prior to his appointment as acting NEDA chief, Chua was an undersecretary of the Department of Finance. The comprehensive tax reform could be considered as his brainchild. Celerina Monte/DMS