Finance Secretary Carlos Dominguez III is optimistic that Congress will approve the remaining packages under the Comprehensive Tax Reform Program ahead of the national elections in May.
Dominguez said Tuesday these reforms should include the reduction in the 30-percent corporate income tax and the overhaul of the fiscal incentives system.
He said the current Congress has several remaining session days in the first half of 2019 before a new set of lawmakers gets elected in May, providing them some time to tackle the proposals.
The 17th Congress adjourned session on Dec. 15 for the traditional yearend break and will resume work on Jan. 14. It will adjourn again on Feb. 9 and resume on May 20, after which it will adjourn sine die on June 8.
Dominguez acknowledged that the coming May 2019 elections could dim hopes of getting the tax reform packages approved in the current Congress.
“We will discuss again with them [legislators] and see how we can push [the tax reform packages],” Dominguez said in a recent interview.
Finance assistant secretary Antonio Joselito Lambino II echoed Dominguez’s statement and said the DoF would push for the remaining tax reform packages to complement the first CTRP package—the Tax Reform for Acceleration and Inclusion law—and 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,” said Lambino.
The remaining CTRP packages pending in Congress include Package 1B on the reforms in the Motor Vehicle Users’ Charge. This is still being deliberated in Congress;
Package 2 covers the corporate income tax reduction and reforms in fiscal incentives. The House of Representatives approved its version of the measure—the Tax Reform for Attracting Better and High-Quality Opportunities or Trabaho bill—in September. The Senate version remains pending at the ways and means committee.
Package 2 plus proposes additional excise taxes on tobacco and alcohol products as well as an increase in the government’s share from mining while Package 3 covers reforms in property valuation to make the system more equitable, efficient and transparent. It proposes to adopt the Schedule of Market Values as single valuation base for national and local property taxation.
Meanwhile, Package 4 proposes the rationalization of capital income taxation to address the multiple rates and different tax treatments and exemptions on capital income and other financial instruments. The House already approved its version of the measure in November, while the Senate has yet to tackle the House-approved version.
Dominguez said earlier that Packages 2 and 3 were expected to be revenue neutral, while the DoF proposal under Package 1b on the MVUC was expected to bring in an additional P15 billion in a full year of implementation.
Package 2 plus, which will help fund the universal health care program, is estimated to yield an additional P60 billion in the first year.
Package 3, meanwhile, will be revenue neutral for the national government but would haul in additional funds for the local government units. Package 4 will initially collect additional revenues for the government and will gradually be revenue neutral once it is fully implemented.