President Rodrigo Duterte is fully supportive of the Comprehensive Tax Reform Program that will play a pivotal role to dramatically reduce poverty, achieve economic inclusion and catapult the country into an upper middle-income economy by 2022, Finance Secretary Carlos Dominguez III said over the weekend.
“The president has already held three meetings with leaders of Congress, and the basic subject of those meetings were the tax reforms,” Dominguez said at a recent Makati City forum.
“And he has indicated his strong support for the tax reform program,” Dominguez said.
Dominguez was referring to CTRP whose first package under House Bill No. 4144 was filed at the House of Representatives on Jan. 17 by Rep. Dakila Carlo Cua, chairman of the House committee on ways and means.
“Definitely, President Duterte is willing”•as you put it”•to spend his political capital on this [CTRP],” Dominguez said.
Dominguez said while the new government raised about P900 billion from China and Japan alone, this wouldn’t be enough to fund the administration’s massive fiscal spending strategy, which would actually cost an estimated P8 trillion over the president’s six-year term.
“Well, quite frankly, we’ve raised a total of something like P800 billion or P900 billion, and that will be spent over let’s say six years, right? Certainly, that’s not enough to cover the P8-trillion program that we need to spend on,” Dominguez said.
“So we have to somehow pay for it, and the only way to pay for it is to have a tax reform program,” he said.
Dominguez said with the gross domestic product expanding 6.8 percent in 2016, there was more reason for DoF to aggressively push for the proposed CTRP and Congress to swiftly act on it so that the Duterte government could raise enough funds for its unparalleled public spending program.
He said the CTRP was integral to the new government’s high”•and inclusive”•growth strategy because it needed to raise an extra P1.07 trillion until 2022 to close the infrastructure gap.
The planned infrastructure buildup would include 64 projects for implementation.
The Budget Department estimated that the incremental revenues that would be raised from Package One of CTRP would amount to P163 billion in 2018, consistent with the planned increase in the budget deficit from 2.7 percent of GDP in 2016 to 3 percent of GDP beginning 2017.