Advertisement

Tax reform 2 gets big push

Leaders of the House and the Senate said Tuesday they would push for the passage of the second package of the administration’s tax reform law.

“It’s a priority,” House Speaker Gloria Macapagal Arroyo said on the sidelines of a congressional hearing conducted by the House committee on ways and means about the second package of the Tax Reform for Acceleration and Inclusion law.

Arroyo said TRAIN 2, which will lower corporate taxes, is part of President Rodrigo Duterte’s legislative agenda, and was tagged as urgent in his State of the Nation Address.

“I said in my very short statement upon assumption, the first and foremost job I have as Speaker is to carry out the legislative agenda of President Duterte,” Arroyo said.

Under the proposed second package of the TRAIN law, the government aims to lower the corporate income tax from 30 percent to 25 percent and to modernize the fiscal incentives to attract new and growing industries.

While the passage of TRAIN 2 is expected to go smoothly in the House, it may be in for rough sailing in the Senate, where some senators have been critical of TRAIN.

Presidential spokesman Harry Roque earlier said the Palace would explain to the senators that they have a misconception on the second package of the administration’s tax reform law.

Arroyo met with the President’s economic managers and some lawmakers to discuss economic issues such as inflation, after attending the House ways and means hearing.

Senate President Vicente Sotto III said he would push for the passage of TRAIN 2 despite the misgivings of some of his colleagues.

“I’ll file a counterpart [bill],” said Sotto after hearing the explanations of Finance Undersecretary Karl Chua regardng the benefits of the measure, describing the briefing as “very enlightening.”

“It opened my eyes. We should debate on it in the Senate,” said Sotto who also said he will first read the documents from the Department of Finance.

Sotto said the new package would benefit small and medium enterprises by cutting their corporate taxes.

In a briefing before the House, Finance Secretary Carlos Dominguez III said the government is hoping to raise P3.2 trillion in revenues in 2019, including about P181.4 billion from tax reform, which will help sustain its strong fiscal performance and aggressive spending plan into the medium term.

Dominguez told lawmakers that this revenue goal was equivalent to 16.5 percent of gross domestic product, which is an improvement from the 15.6 percent attained in 2017 and this year’s target of 16.2 percent.

The projected amount of P181.4 billion will come from TRAIN, as well as from the proposed tax amnesty program and adjustments in the Motor Vehicle Users Charge, which comprise Package 1B of the Duterte administration’s comprehensive tax reform program, Dominguez said.

The Finance secretary said the government expects tax revenues to grow by 12.7 percent in 2019 as the Bureaus of Internal Revenue and of Customs are expected to post collection growths of 13.1 percent and 11.3 percent, respectively.

Dominguez informed lawmakers that from January to June of this year, total revenue collection reached P1.41 trillion, which is 20 percent higher than the same period last year and exceeded the target by 8 percent or P105.7 billion.

Dominguez also assured lawmakers during that the briefing for the House committee on appropriations that the Philippines’ fiscal position remained strong, with revenues expected to be above target, the debt burden continuing to decline and the government’s spending program sustainable over the medium term.

“This administration is committed to long-term fiscal sustainability. Be assured we will continue to exercise fiscal responsibility and maintain sound fiscal policies to support higher and more inclusive growth,” Dominguez said during the briefing. “Fiscal strategy remains to be prudent, sustainable, and supportive of the government’s development objectives.”

To generate additional revenue streams that will enable the government to sustain its massive infrastructure buildup and increased spending on human capital development, Dominguez said the Duterte administration would push for the passage into law of the rest of the packages under its CTRP.

Following the enactment of TRAIN, Dominguez said the DoF submitted the rest of the Duterte administration’s tax reform packages to the Congress and is hoping that lawmakers would approve them this year.

Topics: House , Senate , tax reform law , House Speaker Gloria Macapagal Arroyo , Tax Reform for Acceleration and Inclusion law
COMMENT DISCLAIMER: Reader comments posted on this Web site are not in any way endorsed by Manila Standard. Comments are views by manilastandard.net readers who exercise their right to free expression and they do not necessarily represent or reflect the position or viewpoint of manilastandard.net. While reserving this publication’s right to delete comments that are deemed offensive, indecent or inconsistent with Manila Standard editorial standards, Manila Standard may not be held liable for any false information posted by readers in this comments section.
AdvertisementKPPI
Advertisement