The Duterte administration plans to put in place a “revenue-positive” comprehensive tax reform package that will still allow the government to generate more revenues to be spent on public goods and services even if income taxes are lowered.
Tax managers, for their part, pitched to top officials of the Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) further reforms in the tax system, including repealing a number of BIR issuances deemed not business-friendly.
Budget Secretary Benjamin E. Diokno told the general membership meeting of the Financial Executives Institute of the Philippines (Finex) that new tax measures would compensate for the foregone revenues expected from President Duterte’s promise to bring down income tax rates.
“[The tax reform package] will be comprehensive, I’m telling you. We will adjust the personal income tax to make it competitive. We will probably also adjust corporate income tax. But we will (increase) the tax on soft drinks and the excise tax on petroleum products,” Diokno said.
The budget chief noted that petroleum prices have gone down significantly such that finally slapping an excise tax of P4 per liter of diesel—currently exempt—would result in an additional P60 billion in revenues yearly.
Also part of the comprehensive tax reform package was the rationalization of tax incentives being given away to investors, Diokno added.
The Cabinet-level interagency Development Budget Coordination Committee (DBCC) was also planning to expand the coverage of the value-added tax (VAT) while also repealing bank secrecy for tax purposes to allow the BIR to take a peek into accounts of suspected tax evaders, Diokno told reporters. Ben O. de Vera