More tax reforms seen in 1st quarter of 2018
Congress is expected to pass by the first quarter of 2018 a so-called tax reform package “1B,” which will contain tax amnesty as well as other tax administration measures that were excluded in the bicameral-approved first package.
Finance Secretary Carlos Dominguez III told reporters Friday that the first package of the Tax Reform for Acceleration and Inclusion Act aimed at slashing personal income tax rates while jacking up taxes on consumption has been divided into “1A,” referring to the one already approved by both houses of Congress, and an upcoming “1B.”
“The legislature has committed that they will pass the second or part B of the tax package one by the first quarter of next year, and that will involve the tax amnesty as well as [higher] motor vehicle user’s taxes, and lifting bank secrecy in criminal cases,” Dominguez said.
Dominguez had said that the government was considering amnesty for taxpayers with deficiencies in payments of property taxes, estate taxes, regular taxes such as income taxes and value-added tax (VAT), as well as amnesty on pending cases in courts.
Dominguez said package 1B would result in a revenue gain of about P30 billion.
As for tax reform package 1A, Dominguez said they were still computing how much revenues it would generate, although initial estimates by the Department of Finance last week placed it at more than P90 billion in the first year of implementation, below the P130-billion level deemed needed to support the Duterte administration’s massive “Build, Build, Build” infrastructure program.
“This is legislation and we understand that the administration does not always get 100 percent of what it wants. This is something, though, that is a step forward. In other words, when they ratified it on Wednesday, we have a brighter future than what we were looking at last Tuesday,” Dominguez said.
For Dominguez, Congress’ ratification of the first tax reform package was “an important milestone in our history.”
“It’s the first time we have done a tax reform without any pressure from the outside, no crisis, no external pressure,” he noted. “I think it’s a sign of maturity for our country. It is also the first of five packages that will, once and for all, start fixing the structural problems of the tax system that has become unfair, complex and inefficient. This tax reform will also raise the revenues needed to make real positive change to each Filipinos’ lives.”
“First of all, package one corrects the long standing inequity of our tax system by reducing income taxes for 99 percent of income taxpayers, thereby giving them the much-needed relief after 20 years of no adjustment. So everybody’s first P250,000 [salary] is now tax-free,” he pointed out.
