Instead of resorting to bonds and extra borrowings, the Arroyo government may just ask large taxpayers to advance the payment of their taxes for the next two years to finance various rehabilitation and reconstruction projects in the aftermath of two devastating cyclones.

Quezon Rep. Danilo Suarez, one of the financial experts in the House of Representatives, came up with this suggestion, which he described as a “better alternative” than previous proposals for raising the money needed to rebuild areas devastated by tropical storm “Ondoy” and typhoon “Pepeng.”

His suggestion is embodied in Joint Resolution No. 50 that he filed with the House of Representatives Monday.

The resolution authorizes the Bureau of Internal Revenue (BIR) to collect 10 percent from the gross receipts of all large companies for the years 2010 and 2011 to serve as rehabilitation fund.

Gross receipts are total sales of a business in a year, before deductions for returns and allowance or trade discounts.

Suarez said the measure could raise at least P100 billion, which can be used by the next administration to continue the rehabilitation of areas affected by the cyclones.

“This administration will pave the way for the next administration to have enough buffer funds to undertake the rehabilitation,” Suarez told a press conference.

The veteran administration lawmaker said the measure will not only help address the ballooning budget deficit and prevent the government from incurring more loans, but also to allow the private sector to participate in the rehabilitation efforts.

“It’s payback time. It’s a gesture of goodwill (on the part of the private sector),” he said.

Suarez said asking large taxpayers to advance their tax payment is a better alternative than issuing a P50-billion worth of reconstruction bonds, which the government has to pay the interest or repay the face value.

“The positive effect of this will be tremendous. If we can do this we can get good ratings from international credit rating institutions like Moody’s and Fitch,” he pointed out. Suarez said he was optimistic large companies will be able to comply as “all of them will be growing by 2010.”

“But if something wrong happens to any of the companies, which is unlikely to happen, their advance tax payment will have to be returned to them or it can be in the form of a tax credit,” he added.

Suarez disclosed that before filing the joint resolution, he already explained his proposal to President Arroyo.

He said the Chief Executive was initially apprehensive. “But after explaining to her that the amount will be used by the next administration, President Arroyo said it was a good idea. She liked it,” he added.

Those covered by the measure are large taxpayers such as alcohol, tobacco, pharmaceutical, petroleum and telecommunications companies.

According to the recent situation report of the National Disaster Coordinating Council, the total damage caused by Ondoy and Pepeng is P30.343 billion, affecting a total of 1.83 million families.

The Philippine government is suffering from a ballooning fiscal deficit which, as of September 2009, amounts to P237.536 billion, while its total outstanding debt reached P4.22 trillion as of 2008, even before the two cyclones devastated the nation.