Citing the growth in total tax collections in the first quarter of 2025, Finance Secretary Ralph Recto withdrew the Department of Finance’s proposal to increase capital gains tax, donor’s tax, and estate tax.
GROWTH Bill Withdrawal
In a statement, Recto said the government is not planning to introduce new taxes; instead, the department will focus on enhancing non-tax revenue sources.
“Given our current strong fiscal performance, these are not needed at this time… The government is properly managing its finances, ensuring that public needs are met without burdening the citizenry with new taxes.”
Ralph Recto, Secretary, Department of Finance
Moreover, in a letter to Albay Representative Joey Salceda, chairman of the House Ways and Means Committee, Recto also withdrew the proposed amendments to the Capital Markets Efficiency Promotion Act, citing better-than-expected revenue performance in the first quarter of the year.
As mandated, the committee’s jurisdiction covers fiscal, monetary, and financial affairs of the national government, including tariffs, taxation, revenues, borrowing, credit, and bonded indebtedness.
Q1 Tax Collection Growth
According to Recto, total tax collections in the first quarter of 2025 rose by 13.55%, reaching ₱931.5 billion.
Specifically, the Bureau of Internal Revenue (BIR) collected ₱690.4 billion, marking a 16.67% increase from the previous year, while the Bureau of Customs (BOC) recorded a 5.72% rise in collections, reaching ₱231.4 billion for the same period.
“At this point, current revenues are more than sufficient to support our expenditure requirements. We are meeting our obligations, funding key programs, and growing the economy without having to impose new taxes on our kababayan… We are also decisively managing our deficit level, while maintaining a sustainable debt trajectory aligned with our Medium-Term Fiscal Framework.”
Ralph Recto, secretary, Department of Finance
The DOF expects to collect ₱4.64 trillion in total revenues for 2025, with approximately ₱3.23 trillion from the BIR and ₱1.1 trillion from the BOC.
Looking Forward
Recto emphasized the department’s commitment to implementing key reforms that will sustain and attract investments while improving government revenue. These include the CREATE MORE Act, the Ease of Paying Taxes Act, amendments to the Foreign Investment Act, the Retail Trade Liberalization Act, the Public Service Act, and the Public-Private Partnership Code, among other important reforms.
Moreover, the Finance Secretary highlighted that it will persist in identifying and enhancing non-tax revenue streams to achieve the revenue goals outlined in the Budget of Expenditures and Sources of Financing.
What Is the GROWTH Bill?
Short for Government Revenues Optimization Through the Wealth Tax Harmonization Bill, it is a proposed tax reform measure by the Marcos administration, intended as a successor to the previous administration’s Passive Income and Financial Intermediary Taxation Act.
While the earlier act was seen as potentially resulting in ₱125.9 billion in revenue losses from 2025 to 2029, the GROWTH Bill aims to generate ₱300 billion in additional revenues between 2025 and 2030, helping reduce the government’s budget deficit and minimize borrowing.
Key Features of the GROWTH Bill
- Increasing tax rates on capital gains, donor taxes, and estate taxes from the current 6% to 10%.
- Raising the tax rate on foreign currency deposit accounts for residents from 15% to 20%, to match the rate on peso deposits.
- Removing exemptions on certain passive income streams, including earnings from savings deposits, time deposits, deposit substitutes, and long-term negotiable certificates of deposit.
- Maintaining existing rates on gross receipts and withholding taxes, but eliminating tax exemptions to broaden the tax base.
This article is published on BitPinas: Recto Withdraws GROWTH Bill Amid Strong Q1 Tax Surge
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