The Department of Finance has pitched to Congress a revised version of the first package of its comprehensive tax reform proposal that will now include mandatory marking of oil products as well as the grant of absolute amnesty on estate tax deficiencies.
Inquirer sources said House ways and means committee chair and Quirino Rep. Dakila Carlo E. Cua was scheduled to file the bill titled Tax Reform for Acceleration and Inclusion Act Wednesday, a day before Congress goes on Christmas break, the DOF’s.
The DOF submitted to both houses of Congress a bill containing the first package of its tax policy reform program, but a number of provisions were frowned upon by legislators, including the removal of value-added tax (VAT) exemption on senior citizens’ nonessential purchases.
“The Tax Reform for Acceleration and Inclusion [bill] envisions to create a tax system that is simpler, fairer and more efficient, characterized by low rates and a broad base that promotes investment, job creation and poverty reduction,” read the House bill to be introduced by Cua, a copy of which was obtained by the Inquirer.
“This will be complemented by major tax administration reforms in both the Bureau of Internal Revenue and Bureau of Customs,” it added.
The bill noted that the package sought to lower personal income taxes, broaden the VAT base, adjust excise taxes on petroleum and automobiles, reduce the estate and donors tax, and provide an amnesty to past estate tax cases.
Under the first package, the following tax administration measures were to be pursued: Mandatory use of fuel marking; recognition of e-receipts; mandatory interconnection of large and medium firms’ point-of-sale machines and accounting system with the BIR; mandatory use of GPS locks when transporting cargo from ports to economic zones and free ports; shift to quarterly VAT and percentage tax filing to improve compliance, and relaxation of bank secrecy for fraud cases.
While it was initially supposed to be included in the succeeding tax reform packages, the DOF is now moving to include in the first package the reduction of estate and donors tax to 6 percent while also providing absolute amnesty on past estate taxes that had been unpaid.
The bill retained the salient provisions of the original first package as proposed by the DOF, including adjusting tax brackets to correct “income bracket creeping”; reducing 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 shifting to a simpler modified gross system.