Congressman Leviste suggests reducing VAT, cutting government budget to prevent corruption
In the wake of new allegations of corruption in flood control projects, Congressman Leandro Leviste has proposed solutions to help the Philippines address this misconduct.
In an interview on ANC, the Batangas 1st District Representative stated that corruption could be managed by reducing the budget of the Department of Public Works and Highways and imposing a wealth tax on land of over P300,000 per square meter.
According to him, a reduction of the value-added tax from 12% to 10% will give Filipino families more disposable income that they can use for spending, saving, or investing.
"[It] might result in the government foregoing maybe P130 billion a year in revenues, but that going directly into the disposable income of every Filipino family," he noted.
"Instead of having ayuda, where there's a lot of administrative costs to collect the money from the taxpayers and then redistribute it to selected beneficiaries, if we just lowered the VAT by 2%, then that would result in around P5,000 more of disposable income for every family," Leviste explained.
"I think that that is actually one solution to the issue of DPWH or any agency, because if you have a smaller budget, then at least there's less potential for corruption," he added.
Leviste also stated that increasing taxes on wealthy individuals would help prevent corruption at its source and in its use.
"If people are using their proceeds to buy homes in high-end subdivisions, then putting aside how they acquired that wealth, at least that cannot be hidden. It cannot be brought to another country. The homes are there," he said.
"If there's, for example, 5,000 families that own property worth over P2 billion, that's a P10 trillion asset class. And if you impose a 1.5% tax on that, then you can generate P150 billion a year in government revenues, then you can pay for the reduction in VAT," he added.
While Leviste acknowledged that it's "so hard to investigate and catch an act of corruption," he stressed that "it should be done."
"It's easier to have a more progressive tax code so that the proceeds of those acts can at least be taxed and then returned to the government," he said.
Levista is now striving to propose a new tax to the Department of Finance, but has yet to receive support.
He also noted that the Philippines has the highest VAT rates in Southeast Asia at 12%, followed by Indonesia at 11%, Vietnam at 10%, Singapore at 9%, Thailand at 7%, and Malaysia at 6%.
"The VAT is one of the most aggressive forms of taxation because it's predominantly paid by the poor. And if we want to increase the disposable income of the poor, then we can bring our VAT along the lines of other ASEAN countries [at] 10%," Leviste said.
The corruption issue involving billions of pesos has been a hot topic in the news and on social media for weeks now. Some users, including celebrities and personalities, even turned their attention to the children of politicians and major contractors, whom they call "nepo babies," for flaunting their lavish lifestyles and frequent travels.
President Ferdinand Marcos Jr. earlier called out government officials involved in the would-be corruption in flood control projects in his fourth State of the Nation Address.
Following this, the government has now launched the "Sumbong sa Pangulo" website, where the public can track and report flood control projects. Marcos also published a list of 15 contractors that exclusively bagged 20% of all flood control projects worth P100 billion in the last three years.
