MANILA – The Asian Development Bank (ADB) has vowed to support Finance Secretary Ralph Recto’s core enhanced tax collection strategy of using digital technologies for a more efficient and aggressive tax administration.
In a statement, the Finance department said Recto recently met with senior officials of ADB where he cited the need to have more unified inter-agency coordination among national and local agencies to harmonize records of registered taxpayers and optimize tax collection efficiency.
The ADB, through the USD400-million Domestic Resource Mobilization policy-based loan, supports the country's efforts to creating a fair and efficient tax system.
The policy-based loan aims to enhance domestic resource mobilization policies and legal frameworks; modernize tax administration through digital transformation; and strengthen international tax cooperation and exchange of information.
A second subprogram is pipelined for 2025.
The ADB is also supporting the Bureau of Internal Revenue in its digitalization efforts through technical assistance that prepares an investment project in 2025.
The DOF said the ADB also vowed to continue supporting the government in delivering more effective and innovative infrastructure projects through the Infrastructure Preparation and Innovation Facility (IPIF).
The IPIF is a technical assistance loan provided by the ADB to support initiatives of the Department of Transportation and the Department of Public Works and Highways in preparing, implementing, and managing public infrastructure investments.
Both sides also agreed to work on developing pipeline projects and programs, particularly in green infrastructure and clean energy, under the USD10 billion climate financing commitment of the ADB for the period 2024 to 2029.
During the meeting, Recto informed the ADB of the government’s efforts to attract foreign and domestic investments.
These include pushing for the amendments of the Corporate Recovery and Tax Incentives for Enterprises Act to tailor-fit the interests of investors in strategic investments and pushing for the passage of refined tax reform measures to boost revenue generation.
These reforms include the imposition of excise tax on single-use plastics, the rationalization of the mining fiscal regime, the imposition of value-added tax on digital service providers, the Passive Income and Financial Intermediary Taxation Act, and the Motor Vehicle Road User's Tax.
"The ADB expressed its willingness to extend support for the said reform proposals, noting that it has previously extended technical assistance to the Department on developing sound tax and fiscal policies," the DOF said.
As of Sept. 30, 2023, the ADB is the Philippines’ second-largest official development assistance (ODA) partner with a total commitment of USD9.67 billion, accounting for 28 percent of the total ODA share. (PNA)
