DOF: Swift passage of tax bill set
YOKOHAMA, Japan—Finance Secretary Carlos G. Dominguez III expects faster approval of the succeeding packages of the Duterte administration’s banner tax program after a House committee made headway in easing the burden on personal income earners while imposing new taxes on consumption.
On the sidelines of the Asian Development Bank’s 50th annual meeting Thursday, Dominguez told reporters that the administration was hopeful Congress would be able to pass House Bill No. 4774, or the first part of the comprehensive tax reform package, by midyear.
“You know, that process is not in the hands of the administration anymore in the sense that it’s the legislative’s process and there are reasons why the process is long—we [have] to respect it. But I have to say, this was one of the first bills we put out—we put it out within the 100 days of our coming into office, and I think it’s quite an accomplishment in itself,” Dominguez said.
HB 4774, introduced by House ways and means committee chair and Quirino Rep. Dakila Carlo Cua, contains the DOF’s proposal to lower personal income taxes, broaden the value-added tax base by cutting down on exemptions, increase excise taxes on petroleum and automobiles, as well as reduce the estate and donors’ tax rates.
Specifically, the bill will adjust personal income tax brackets to correct “income bracket creeping”; reduce the maximum personal income tax rate to 25 percent over time, save for the “ultra-rich” who would be slapped a higher 35 percent; and shift to a simpler modified gross system.
It will also slap tax on lottery, while lowering the estate and donors’ taxes to a flat rate of 6 percent.
Under the first package, the following tax administration measures will also be pursued: mandatory use of fuel marking, mandatory issuance of e-receipts, mandatory interconnection of large and medium firms’ point-of-sale machines and accounting system with the Bureau of Internal Revenue, mandatory use of GPS locks when transporting cargo from ports to economic zones and free ports, and relaxing of bank secrecy for fraud cases.
The House ways and means committee recommended for approval the bill late Thursday.
“I want to thank the Speaker, the Deputy Speaker, and the leadership of the House, including the chairman of the ways and means committee who put a lot of hard work in this. We had more than 80 hours of discussion and they seemed to have passed the majority of the bill. It’s good. I’d like to thank them and I hope this starts the momentum,” Dominguez said.
Moving forward, Dominguez said he expected the next tax reform packages, aimed at improving the business environment by bringing down corporate income taxes, among others, would be “relatively easier.”
The Duterte administration’s comprehensive tax reform program, aimed at augmenting the P1 trillion in priority investments needed by the administration in the next six years to sustain at least a 7-percent economic growth until 2040 and slash the poverty incidence, would come in at least four packages.
