Philippines to Hunt Tax Evaders to Boost Revenue, Dominguez Says

(Bloomberg) -- The Philippines will target tax evaders as it seeks to raise revenue to finance its infrastructure plans, the finance secretary said.

“We have gone after very big tax evaders,” Carlos Dominguez said in an interview with Bloomberg TV's Stephen Engle on Wednesday. “Our tax teams are very successful in gathering the evidence of tax evasion,” he said on the sidelines of the Credit Suisse Asian Investment Conference in Hong Kong.

Dominguez is boosting tax compliance and pushing through a tax reform plan to help ward off a credit-rating downgrade as the budget deficit widens. Lawmakers have opposed the proposals, which would raise taxes on cars and fuel while lowering some duties in order to raise an estimated 163 billion pesos ($3.2 billion) a year in revenue. Dominguez said he is confident the first of the bills will be passed by about October.

The government filed a criminal complaint against cigarette-maker Mighty Corp. this month for not paying 9.56 billion pesos of taxes for allegedly using fake stamps on its products.

“We are also pushing very hard on tax collections,” Dominguez said. Higher taxes on fuel and cars were necessary because “we're going on a big infrastructure push,” he said.

President Rodrigo Duterte needs the funds to pay for $160 billion of infrastructure projects and his war on drugs. The Philippines has a tax revenue ratio of 13.6 percent of gross domestic product in 2014, which is lower than other regional peers, such as Malaysia and Thailand, according to data from the World Bank.

Click to read about Duterte pushing for tax reform

--With assistance from Ditas Lopez

To contact the reporter on this story: David Roman in Singapore at droman16@bloomberg.net.

To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Karl Lester M. Yap