More groups back proposed tax reform package

MANILA, Philippines -  Former government officials, business groups and civil society organizations have called on the Congress to approve the government’s tax reform proposal as it could deliver additional government revenues that can be used to address the country’s infrastructure gap and provide social services to the poor.

Former prime minister Cesar Virata said Congress needs to approve the Comprehensive Tax Reform Program (CTRP) as the government cannot depend on foreign assistance alone to implement infrastructure projects and provide government services.

“It is true that we’re being helped by international financial institutions but we cannot solely rely on assistance from other countries. We cannot rely on indebtedness to deliver infrastructure,” Virata said.

 “I support the tax reform because it is timely and we need additional revenues to support government programs, provide employment, education and health to poor sections of our society,” he added.

Virata was joined by former National Economic Development Authority director general Felipe Medalla and former finance undersecretary Romeo Bernardo in lobbying for the approval of the CTRP.

“What is progressive in this tax reform proposal is its objective to solve the infrastructure gap, and to ensure that the government will spend the money for the benefit of the people, and offset the negative effects to the poor directly. Spending has to be frontloaded and cash transfer can be implemented immediately,” Medalla said.

Bernardo, for his part, stressed the need to address the inequity in personal income taxes and petroleum taxes.

Meanwhile, the Action for Economic Reform, together with former Bureau of Internal Revenue commissioner Rene Bañez, former agriculture undersecretary Ernie Ordonez, Renato Reside of University of the Philippines School of Economics, Foundation for Economic Freedom, Alyansa Agrikultura, Rural Urban People’s Linkages and National Federation of Labor Unions also signed a unity statement appealing to the members of the House Committee on Ways and Means to approve House Bill 4744 or the Tax Reform Acceleration for Inclusion bill.

 The groups and former officials warned that unnecessary compromises would result in revenue shortfall and budget deficit, which would translate to higher costs of doing business, increased dependence on debt, higher interest rates and credit rating downgrade, and eventually, slower economic growth and loss of jobs.

The Trade Union of the Philippines, Financial Executives of the Philippines, and National Tax Research Center have also backed HB 4744, according to the Department of Finance.

HB 4744, which contains the first package of the DOF’s CTRP, was filed by House ways and means committee chairman Dakila Carlo Cua.