Economic managers are optimistic that the measures in the version of the first tax reform package that would be approved by the two houses of Congress would generate higher net revenue to finance government projects.
“We have every confidence that the legislature will come up with revenues that will be sufficient to fund all the projects of the President including social , educational and the infrastructure projects,” Finance Secretary Carlos G. Dominguez III told reporters last week.
Department of Finance computations released last week showed that that the estimated total net revenue of P59.9 billion under Senate Bill No. 1592 introduced last month was the lowest compared to the DOF’s original proposal with P157.2 billion and House Bill No. 5636’s P119.4 billion.
The first package, aimed at slashing personal income tax rates while jacking up taxes on consumption, is pending approval in the Senate after it was approved by the House of Representatives in May.
Under the proposed P3.767-trillion national budget for 2018, P134 billion has been assumed to come from the first tax reform package. The estimated net gain from SB 1592 will fall short of the said budget assumption.
Dominguez said the DOF and the Senate were still firming up SB 1592’s final net revenue figure as senators “had some new ideas” during last week’s plenary deliberations.
The Finance chief said the bicameral committee was expected to come up with the final version of the first tax package by mid-November, when Congress resumes session after a one-month break starting Oct. 13.
For his part, Budget Secretary Benjamin E. Diokno told reporters also last week that he was “optimistic” that the net revenue gains of the bicameral version would be closer to that of the Lower House-approved bill.
“The P119-billion net revenue is just okay, considering the huge revenue loss from the reduction in personal income tax, which will benefit 99 percent of taxpayers. At least you have an extra P20,000 in your pocket,” Diokno said.