IMF: Infra spending won’t succeed without tax reform
The government’s grand plans will be nothing without additional revenues.
The International Monetary Fund (IMF) could not stress enough just how big a game-changer the planned tax reform plan of the government is, so much that the life of the “Build, Build, Build” initiative depends on it.
“Staff welcomes the first tax reform package designed to create additional fiscal space, and encourages the authorities to consider additional revenue measures,” the IMF said in its latest commentary on the Philippine economy.
“The ambitious development agenda depends on a series of comprehensive tax reforms that could create additional fiscal space.”
The IMF has long been lamenting the Philippines’ narrow revenue collections, which they said has been limiting spending plans of the government.
“The combination of high credit growth, buoyant private investment, and fiscal expansion without tax reform could lead to overheating of the economy. On the upside, approval of the first tax reform package would lead to a sustainable increase in infrastructure investment,” the multilateral lender added.
Much depends on Congress’ approval on the measure ahead of the January 1, 2018 target set by the Department of Finance.