MANILA, Philippines — The Department of Finance (DOF) is still optimistic that the remaining packages of the Duterte administation’s Comprehensive Tax Reform Program (CTRP) would be passed by Congress before the elections this year.
Finance Secretary Carlos Dominguez said the current Congress still has several session days remaining in the first half before a new set of lawmakers gets elected in May, providing them time to tackle the proposals under the CTRP and hopefully approve them.
Dominguez acknowledged, however, the proximity of the May 2019 elections, which could dim chances of getting the tax reform packages approved by the current Congress.
“We will discuss again with them (legislators) and see how we can push (the tax reform packages),” Dominguez said.
The 17th Congress adjourned session on Dec. 15 last year for its traditional yearend break and will resume on Jan. 14. It will adjourn again on Feb. 9 and resume session on May 20, after which it will adjourn sine die on June 8.
Finance Assistant Secretary Antonio Lambino echoed Dominguez’s statement and said the DOF would push for the passage of the remaining tax reform packages to complete the process of making the country’s tax system fairer, simpler and more efficient.
“We are always supportive of our legislators when they require technical data and analysis for these proposed tax reforms. We are available 25/8,” Lambino said.
Among the tax measures still pending in Congress is the bill seeking reforms on the Motor Vehicle Users’ Charge (MVUC), which is part of Package 1B of the CTRP. The House of Representatives previously rescinded its passage of the bill, but later on gave its support after President insisted on the abolition of the Road Board.
Also pending are Package 2, which aims to reduce the country’s corporate income tax (CIT) rate while rationalizing fiscal incentives, and Package 2 Plus, which includes bills proposing to increase excise taxes on tobacco and alcohol products, and to overhaul the mining industry’s tax regime.
The DOF is urging Congress to place Package 2 among its top priorities, as this is projected to generate some 1.4 million jobs, mostly in small and medium enterprises (SMEs), over the next decade and create a business environment conducive to inclusive growth.
Meanwhile, the agency is also awaiting for the approval of Package 3, which covers reforms in the country’s property valuation system, and Package 4, which proposes the rationalization of the tax system on capital income and financial instruments.
Packages 2 to 4 already passed the scrutiny of the House of Representatives, and are being discussed in the Senate.
According to the DOF, Packages 2 and 3 are expected to be revenue neutral, while the DOF proposal on the MVUC is expected to bring in an additional P15 billion in the first year of its implementation.
Package 2 plus, which will help fund the universal health care (UHC) program, is also estimated to yield incremental revenue amounting to P60 billion in the first year—that is, if Congress adopts the original DOF proposal.