New Forms of Financing the Fiscal Deficit

---

For the government to fulfill its role as the overseer of development, it must first and foremost collect sufficient resources to finance its numerous programs. At present, the Arroyo administration is committed to wage a battle against poverty, and thus, resources must be allocated efficiently and equitably to the various sectors of Philippine society such as housing, health, education, national security, agriculture and fisheries, and good governance, among others. This article implies that more attention have been given to efforts to improve revenue collection than financing the fiscal deficit. In relation to improving the tax system of the government, the DOF proposes the new scheme of gross income taxation in order to generate more revenues. However, the writer is cautious against its implementation, as a closer look would show that the negative impacts offset the expected positive gains from the new scheme.