DAVAO CITY - The economy is "strong enough" to weather the impact of new taxes, which are necessary to fund a long-delayed infrastructure overhaul, Finance Secretary Carlos Dominguez said Tuesday.
Growth is robust, interest rates are low and the currency is relatively strong, giving the government an opportunity to impose excise taxes on diesel and gasoline, among others, Dominguez told businessmen here.
"Our economy is strong enough to take that hit. It's not perfect, but it is a system that we need if we want to improve the infrastructure of our country," Dominguez said.
"If you do not advantage of that situation to change the tax situation, you are very irresponsible," he said.
The new levies are meant to compensate for a reduction in personal income tax rates, which would be enjoyed by up to 90 percent of all taxpayers, he said.
While excise taxes on fuel could stoke inflation, Dominguez said this would affect mostly the rich or around 20 percent of the population who consume 60 percent of fuel in the market.
Dominguez said the government needs to raise up to P8 trillion to build new roads, bridges, railways and airports in the next six years.
"The society needs to invest in infrastructure. If we are going to take that next step to middle income status and finally to high income status," he said.