‘Tax reform to yield P187 B more revenues in 2020’

MANILA, Philippines — The government is expected to generate P187.1 billion in additional revenues next year from the implementation of various tax reform measures, the Department of Finance (DOF) said yesterday.

During a presentation before the Senate finance committee, Finance Undersecretary and chief economist Gil Beltran said the Duterte administration’s Comprehensive Tax Reform Program (CTRP) is estimated to contribute P187.1 billion to the government’s P3.54 trillion revenue program for 2020.

The amount is lower by 4.27 percent than the P195.45 billion original revenue estimate for the CTRP, based on the Budget of Expenditures and Sources of Financing document of the Department of Budget and Management (DBM).

Sought for comment, Finance Undersecretary Karl Kendrick Chua said the decline in expected revenue is likely due to the passage of a watered down alcohol and electronic cigarette excise tax bill in the House of Representatives recently.

“Maybe it’s because the House passed a lower alcohol excise tax bill, which we use as latest data,” Chua said in a text message.

The House of Representatives last Aug. 20 approved on third and final reading House Bill 1026, which seeks to increase the excise taxes on alcohol and e-cigarette products.

However, Chua said the rates in the bill are lower than the proposed rates of the DOF and the Department of Health (DOH). As a result, the projected revenue from the measure reached only P17 billion, half the expected P33.5 billion from the original DOF-DOH proposal.

According to Beltran, P153.8 billion of the total revenue estimate for CTRP is seen to come from the Tax Reform for Acceleration And Inclusion (TRAIN) Act. Another P15.7 billion would be sourced from Republic Act 11346, which will raise the excise tax on regular cigarette packs starting Jan. 1 next year.

He said an estimated P17.8 billion is also seen to be collected from the pending alcohol and e-cigarette bill.

“Package 2 and 4, which make tax incentives and corporate income, passive income, and financial intermediary taxes simpler, fairer, more efficient and regionally competitive, are revenue neutral,” the DOF official said.

According to Beltran, the CTRP would ensure a reliable revenue source that would support economic growth by bankrolling the government’s social and infrastructure programs, while securing financial stability in the long-term.

“The executive branch will continue to be engaged with the legislature in passing the remaining tax reform packages that will generate additional revenue streams for government to fund social amelioration programs,” Beltran said during the hearing.