By Marielle C. Lucenio
THE taxation of carbon emissions is not expected to be of much help in raising revenue to pay down foreign debt, analysts said.
While calling such a tax “laudable, timely… (and) consistent with our international commitments,” Tax Lawyer and Certified Public Accountant Kenneth L. Manuel told BusinessWorld in an e-mail that the promise of using such revenue to reduce foreign debt levels could be raising “false hope.”
Mr. Manuel estimated that a carbon emissions tax will raise the equivalent of 1% of the Bureau of Internal Revenue’s (BIR) collections.
“According to 2016 estimates, a carbon tax would give the government P20 billion in revenue. …Without the carbon tax, the BIR was able to collect P1.9 trillion in taxes in 2020. Hence, the imposition of carbon tax is only expected to generate roughly 1% of collections, and that’s just BIR. We have not yet factored in other revenue-generating government agencies such as the Bureau of Customs,” he said.
Speculation over new taxes arose over the weekend after Finance Secretary Carlos G. Dominguez III granted an interview with CNBC International TV on Friday. Reports emerging in the wake of the interview cited unnamed sources as saying that the government will be looking at “relatively untaxed” sectors of the economy.
When asked to comment, the Finance department told BusinessWorld it is still exploring various tax package options.
Raegan L. Capuno, tax lawyer at Siguion Reyna, Montecillo and Ongsiako Law Offices, said that consumers ultimately bear the burden of nearly all taxes.
“The challenge here is to determine the appropriate tax base for carbon tax imposition,” he said, adding that it is not the most feasible way to raise funds to pay down foreign debt.
Meanwhile, lawyer and energy and environmental policy Antonio M. La Viña said any carbon tax will be beneficial especially if focused on addressing environment, climate change, and revenue needs.
“The backlash will be if the carbon intensive companies pass it on to consumers so that must be prevented or regulated. Otherwise, a carbon tax is like a sin tax. Carbon emissions are bad for society and they should be treated like sin products — cigarettes and alcohol,” he said in a Telegram message.
The Philippines has committed to reducing its greenhouse gas emissions by 75% by 2030 under the Paris Climate Change agreement.
