Borrow if we must to provide Covid-19 relief, solon to gov’t

THE CHAIRMAN  of the House Committee on Ways and Means on Tuesday said the priority for the government is to provide relief and ramping up borrowings to fund its coronavirus disease (Covid-19) response may be necessary. 

Albay Rep. Joey Sarte Salceda said Congress will help find ways to pay for the government debt through various tax policies, particularly those that would boost the country’s credit ratings and make loans cheaper.

“We have to prioritize what we need to survive. Taxes take time to collect, so while they’re good for overall policy and economic stability, the policy I would advise the government to take is to spend what we need now, whatever it takes for the country to survive Covid-19 and its impact on poverty and unemployment, and borrow if we must,” Salceda said in a text message.

“The timeline dictates that we prioritize relief. If we have to borrow, let’s borrow. The Ways and Means Committee will find equitable ways to pay for it. But the priority is to help people. We can even pass the tax measures now with the colatilla that they will be implemented in better economic times,” he added.

Salceda noted that the proposed tax on the digital economy would generate PHP29.1 billion in government revenues, while the taxes on Philippine offshore gaming operators (POGOs) will yield PHP45 billion in revenues annually.

Meanwhile, the proposed Motor Vehicle Road Users' Tax will give the government PHP205 billion additional revenues in a span of five years.

"We will have to do tax policy and administration reforms like the revenue measures we are proposing – digital tax administration, POGO taxes, updated road users’ tax – to help narrow the gap," he said.

He stressed the need for the government to borrow now, otherwise, the balance sheet problems tend to “get worse over time" when neglected.

“We need to borrow, as do many other countries in the world. Even countries with strong non-tax sources like Singapore, with its own sovereign wealth fund, is borrowing immensely for Covid-19," he said. (By Filane Mikee Cervantes)