IMF, DOF craft tax reform plans for next administration

MANILA, Philippines – Tax policy prescriptions for the next administration are being tackled with a team from the International Monetary Fund (IMF) as presidential candidates themselves present their own plans, except Davao City Mayor Rodrigo Duterte.

“They asked about the state of the economy and tax reforms which could be undertaken by the next administration,” Finance Undersecretary and chief economist Gil Beltran said in a phone interview yesterday.

“There is nothing much more that you could do during this administration. So we are more concerned on what can be suggested for the next one,” he said.

An IMF tax policy mission led by fiscal operations assistant director Victoria Perry is in the country until Friday to talk with revenue officials and come up with recommendations.

Industry group Tax Management Association of the Philippines (TMAP) said only poll frontrunner Duterte has not submitted answers to its tax policy survey given two weeks ago.

“We last followed up (on Monday), but we did not get any reply. We are open to receive their response any time,” TMAP president Benedict Tugonon said by phone separately.

The STAR contacted Davao councilor Mabel Acosta of the Duterte camp, but did not get any reply.

Tax issues took center stage on this year’s polls after last year’s failed legislative effort to lower income levies, following President Aquino’s opposition.

For Beltran, ongoing IMF consultations will help the new government proceed with much-needed tax reform agenda.

The DOF presented its draft comprehensive tax reform bill to the IMF team, he said, to get their feedback. The proposal include lower income taxes to be offset by higher excise levies on oil.

In a newsletter, the Bureau of Internal Revenue (BIR) said it also met with the multilateral agency.

“They discussed tax administration reforms of the financial sectors, specifically the compliance risks of large companies, cross-border transactions, withholding tax and tax treaty negotiation,” the newsletter said.

BIR representatives also briefed their IMF counterparts on reforms financed by the recently concluded $54.3-million Revenue Administration Reform Project under the US compact.

Tugonon, meanwhile, said he hoped to come up with comparison of candidates’ tax reform agenda once Duterte submits his survey answers.

As of yesterday, the last one who submitted was administration bet Mar Roxas. The STAR already reported last week tax reform plans by the other contenders.

Among others, Roxas said he is for the adjustment of personal income tax brackets to promote “equity.” He opposed automatic indexation of tax levies to inflation.

He also said “no” to higher excise taxes on oil, something which Sens. Grace Poe, Miriam Defensor-Santiago and Vice President Jejomar Binay support.