Recto vows no new taxes under Marcos term, eyes fiscal efficiency
Ralph Recto —PPA POOL
Finance Secretary Ralph Recto announced that there won’t be any new taxes for the rest of the Marcos administration.
He emphasized the government’s focus on reducing unnecessary spending and enhancing revenue collection efficiency to improve its financial condition.
Recto made these remarks during a recent event where he also stated that the government’s fiscal situation doesn’t warrant the imposition of new taxes.
But the finance chief admitted that improving revenue generation would take time, as the government would have to digitalize its system so it can catch up with the rapid growth of e-commerce, where taxmen are having trouble collecting revenues.
“Let’s try to improve tax collection efficiency … You know, the challenge is we’re moving toward e-commerce. It’s harder to collect in e-commerce,” Recto said.
Last resort
“So I think it is incumbent upon this administration that our last resort is always to increase taxes. Remember, our situation is not that bad. Our debt-to-GDP (gross domestic product) [ratio] is 60 percent, and it will go down,” he added.
The Marcos administration plans to borrow a total of P2.46 trillion from creditors at home and abroad in 2024 to help bridge its budget deficit, which is projected to hit P1.4 trillion this year. Based on latest government forecasts, it is only in 2027 that the budget deficit, as a share of the economy, is expected to return to the prepandemic level of 3.2 percent.
Under Recto, the Department of Finance is pushing for the passage of its “refined” priority tax measures in Congress, which include the proposed value-added tax (VAT) on digital service providers; the imposition of excise tax on single-use plastics; and Package 4 of the Comprehensive Tax Reform Program.
The finance chief has also thrown his weight behind the proposed rationalization of the mining fiscal regime, and the reform on the Motor Vehicle Users’ Charge. Altogether, these reforms are expected to grow revenues to 16.8 percent of GDP in 2028, from 15.5 percent in 2024.
‘Laudable’
Recto—who pushed back his political aspirations in 2025 when he took the finance portfolio last January—also took the occasion to clarify that his decision to not impose new taxes “has nothing to do” with his plans to run for public office in 2028.
A veteran lawmaker, Recto authored the unpopular Expanded VAT law that supposedly cost him his reelection bid in 2007.
“I might not even run,” he said.
Apart from collection efficiency, the finance chief said he was also looking at reducing nonessential expenditures. The government may also study a possible increase in fees and charges, and boost nontax revenues like dividends from state-run firms and proceeds from sale of government assets. INQ
READ MORE: Finance chief Recto unveils ambitious target: P4.3T revenue this year
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