DBCC expects revenues to reach P6.6-T in 2028, pursues additional tax measures

The Development Budget Coordination Committee (DBCC) announced the economic team’s pursuit of additional tax measures in order to bolster revenues to finance the Marcos Jr. administration’s socioeconomic development agenda during the DBCC Press Conference on April 24, 2023.

According to Finance Secretary Benjamin Diokno, the DBCC will be pursuing the legislative approval of revenue-generating measures in addition to the reforms under the Medium-Term Fiscal Framework (MTFF), including the imposition of higher excise taxes on sweetened beverages, rationalization of the Motor Vehicle Road User’s Tax, and reforms to the mining fiscal regime. The revenue impact of these measures is expected to kick in starting 2025.

Proposed Additional Revenue Measures

Given the additional tax reforms, the DBCC projects revenues to increase from PHP3.7 trillion in 2023 to PHP6.6 trillion in 2028, or an average annual increase of PHP512.7 billion.

Specifically, tax revenues are expected to increase from PHP3.5 trillion in 2023 to PHP6.4 trillion in 2028, equivalent to an annual average increase of PHP536.3 billion. As percent of gross domestic product (GDP), tax effort will increase from 14.4 percent in 2023 to 16.8 percent in 2028.

The implementation of the Passive Income and Financial Intermediaries Taxation Act (PIFITA), imposition of value-added tax (VAT) on digital service providers, imposition excise tax on single-use plastics (SUP), and imposition of excise tax on pre-mixed alcohol are expected to begin in 2024.

“These are the four measures that were already included in the Medium-Term Fiscal Framework,” said Secretary Diokno.

Department of Budget and Management (DBM) Secretary Amenah Pangandaman, National Economic Development Authority (NEDA) Secretary Arsenio Balisacan, and Bangko Sentral ng Pilipinas (BSP) Deputy Governor Francisco Dakila Jr. served as panelists during the press conference.