To increase government's revenues, tax reforms should be prioritizedv by the incoming administration as they are expected to generate at least P94.8 billion, the Department of Finance (DoF) said Friday.

Citing official estimates, Finance Undersecretary Gil S. Beltran, said encouraging new lawmen to pass revenue-enhancing laws such as rationalization of fiscal incentives, increase in consumption tax rate and adjustments in sin-taxes will provide an additional P94.8 billion in revenues.

The next Congress may, likewise, simplify the net income taxation scheme.

The government expects an ultimate windfall of about P73.92 billion yearly if the value added tax (VAT) rate is increased gradually from the current 12 percent to 15 percent in the next five years.

The increased revenues are expected to be realized even if the corporate income tax of 30 percent is reduced to a final 25 percent by 2013.

Finance Secretary Margarito B. Teves, whose term finishes on June 30, has been urging lawmakers to pass three major revenue measures aimed at boosting state coffers.

For the case of excise tax, the DoF is already willing to settle for an interim two-tiered sin tax rate on alcohol and tobacco products before having a single-tax rate for all products.

The idea is for it to be a phased-in increase until there is a single rate by 2014.

According to government estimates, the proposed amendments to the sin tax law could raise as much as P19 billion to P20 billion in the first year of implementation, P30 billion to P40 billion in the second year, P40 to P50 billion in the third year and P60 billion to P70 billion in the fourth year.

The DoF said the current tax structure for cigarettes is inequitable because products having the same current net retail price can be taxed differently if one was introduced before January 1997 and another one after 1997.

Aside from the sin tax measure, the government is also pushing for the measure that would rationalize fiscal incentives given by state agencies to investors, and also the measure seeking to simplify the country’s net income taxation scheme.

The government expects to raise P10 billion a year from the proposed fiscal incentives measure and another P6 billion a year from the measure seeking to simplify the country’s net income taxation scheme.

The department has been struggling to contain the government’s swelling budget deficit. This year, it expects the deficit to hit P293.2 billion.