MANILA – Finance Secretary Ralph Recto said the country’s tax revenues must grow by 10.2 percent annually from 2025 to 2028 to ensure a stable and reliable funding stream for government operations.

In a statement on Thursday, Recto said the projected increase would raise total revenues to nearly ₱6 trillion by the end of President Ferdinand R. Marcos Jr.’s term and surpass ₱7 trillion by 2030.

He said the government aims to boost collections through improved administrative efficiency in the Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC) via modernization and digitalization, enhanced non-tax revenues, the proposed General Tax Amnesty, and the extension of the Estate Tax Amnesty.

In 2024, the Department of Finance (DOF) and its attached agencies collected ₱4.42 trillion in revenues to support the government’s ₱5.925 trillion expenditure program.

These funds were used to provide education for 24.54 million public school students, medical assistance for about 6.4 million patients in public hospitals, and ₱871.38 billion in local government funding.

Recto said the DOF is currently tasked with collecting ₱13.65 billion daily to bridge the ₱4.51 billion deficit per day needed to sustain the government’s ₱18.61 billion daily spending.

He cautioned that proposals to lower the value-added tax (VAT) rate could result in massive revenue losses, reducing the government’s capacity to deliver essential services and potentially forcing it to borrow for basic operations such as salaries.

Recto said the projected ₱1.39 trillion VAT collection for 2025 would only be enough to cover nine months’ worth of payroll, premiums, and pensions for active and retired government workers.

He added that the expected ₱576 billion in excise tax revenues would not be sufficient to cover the ₱965 billion combined budget for basic, tertiary, and technical-vocational education programs.

Several bills pending in Congress seek to reduce the VAT rate to ease the financial burden on consumers amid rising prices. (PNA)