THE Department of Finance (DoF) is still considering privatizing government corporations involved in gaming to help raise more revenue, Finance Secretary Carlos G. Dominguez III said Wednesday, after a legislator proposed the sale of government assets as an alternative to raising taxes.
“Yes, we’re prepared to work on privatization of gambling activities,” Mr. Dominguez said in a Viber message.
Senator Franklin M. Drilon issued a statement earlier Wednesday stating his opposition to tax hikes next year.
“We will oppose it. We are still grappling with the impact of the pandemic today and we do not see our country beginning its recovery until the third quarter of 2021. (It’s too early) for them to talk about raising and imposing new taxes by next year,” Mr. Drilon said.
Mr. Drilon instead proposed the sale of government property or privatizing the gaming industry.
“Rather than talk about new taxes, the government can generate funds… through the long overdue sale of government assets and privatization of the gaming industry,” he said.
Mr. Dominguez last week told the Senate that the DoF will start drafting proposals for additional revenue sources for 2021-2022 to pay for debt incurred this year.
The government borrowed P2.47 trillion as of August to plug its deficit following rising pandemic expenses and weak tax collection. It is planning to raise P3 trillion for 2020.
Late last year, the DoF estimated that the privatization of the industry, currently regulated by the Philippine Amusement and Gaming Corp. (PAGCOR) and the Philippine Charity Sweepstakes Office (PCSO), could yield the government P300 billion in fresh revenue.
Mr. Dominguez said “a new study may be required” to arrive at a more accurate revenue projection as the pandemic has drastically affected the gaming industry.
He also confirmed that privatization may still include the operations of PAGCOR and PCSO.
Asked to comment, PAGCOR had not responded at deadline time.
“We must put more money in people’s pockets, not take their hard-earned money by raising taxes. A tax hike or a new tax will further hurt the people and businesses during this extraordinary time in our history,” Mr. Drilon said.
Among the tax bills currently pending in the Senate is the proposed Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) bill seeking to cut the corporate income tax to 25% from 30%, and gradually reducing it further to 20% by 2027. The measure also aims to reform the tax incentive system.
The bill, repositioned as a recovery measure, will cost the government P40 billion in foregone revenue this year, and P650 billion over the next five years. — Beatrice M. Laforga