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PH’s Incoming DOF Chief Rejects Proposed Tax Reform on Crypto

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  • BSP governor Benjamin E. Diokno refused to impose taxation on cryptocurrencies.
  • The tax policy was proposed by DOF last week to reduce deficits.
  • Diokno expects the second quarter will yield higher GDP than the first quarter.

Benjamin E. Diokno, governor of the Bangko Sentral ng Pilipinas (BSP) and the incoming chief of the Department of Finance (DOF), refused to amend the proposed tax policy submitted last week by the finance department. The proposal suggested imposing taxation on cryptocurrency by 2024. Instead, he insisted that the DOF must focus on the government’s existing tax administration during the first year of President-elected Ferdinand R. Marcos, Jr.

Outgoing BSP Chief and also incoming DOF Secretary Benjamin Diokno is not keen on the proposed tax reforms of the outgoing Finance department:

— BitPinas (@bitpinas) May 31, 2022

The tax rules were proposed to address the mounting government debt that is currently 63.5% on a debt-to-GDP ratio, much higher than the recommended ceiling of 60%. The outstanding deficits clocked an all-time high of P12.68 trillion in March 2022.

Diokno expressed that he isn’t worried about the government’s expanding deficits, rather he stressed that the economy can easily bring it down once the nation’s GDP grows by at least 7%.

With the incoming government, the country’s GDP expanded by 8.3% in the first quarter, which makes the revised growth target of 7% to 8% achievable. Dioko believes that the GDP will grow higher in the second quarter.

In an interview with one of the Philippines’ leading news networks ABS-CBN News Channel, Diokno cited all the crises that he witnessed in the country, including its debt level reaching nearly 100% of the GDP, and said, “We are in a better position now”

Coming with over 30 years of experience in finance, Dioko mentioned, “I am not worried about the level of debt, that’s 63%. That’s easily manageable”

For me, the focus should be to sustain growth… Everything goes to growth, so our focus should be on how do we make all our sectors grow… Our problem really is to get back on our growth trajectory because that will solve a lot of problems.

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