House leader assures no new laws increasing public spending to be passed without corresponding revenue-generating measure

August 31, 2010 11:20 am 

MANILA, Aug. 30 – A lawmaker has assured that no new laws increasing public expenditure would be passed without a corresponding revenue-generating or cost-offsetting measure.

Batangas Rep. Hermilando Mandanas, author of House Resolution no. 302, said any management spending or tax legislation that increases the deficit or reduces revenues must be accompanied by a countervailing measure that offsets the increase in deficit or reduction in revenue.

"In order to lessen the country's ballooning deficit, it is necessary to instill fiscal discipline in the public sector," he said.

Mandanas, chair of the committee on ways and means of the House of Representatives, called on both executive and legislative branches of the government to adopt deficit-neutral rules to instill fiscal discipline for a more responsible financial management and promote sustainable economic growth.

The country's deficit for 2010 is expected to reach P281.3 billion, he said.

The Department of Finance (DoF) had endorsed the measure and urged both Chambers of Congress to adopt HR 302.

Mandanas said there is need for a cost-offsetting measure prior to the issuance of an executive or legislative measure granting tax incentives.

"The DoF should issue a certification, saying that the incentive measure is in compliance with the annual fiscal targets and that the tax incentive has been considered in the revenue program for the year's budget of expenditures and sources of financing," he said.

HR 302 also provides that all existing tax incentives granted under various laws and executive orders be reviewed to rationalize tax incentives and eliminate costly ones.

"All bills proposing an increase in public expenditures must be conditioned on the Department of Budget and Management's (DBM) estimate of budgetary and financial impact for the next three years and the enactment and implementation of an offsetting revenue-generating measure," the Batangas solon said.

"All laws with budgetary implications that are enacted without identified supporting revenue measures nor identified expenditures reduction shall be considered harmful to public finances," he added. (PNA)

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