The Department of Finance’s (DOF) plan to have the entire comprehensive tax reform program passed by next year has been off to a good start as a number of legislators in the lower House already filed the remaining packages before the 18th Congress opens today.
Finance Undersecretary Karl Kendrick Chua told the Inquirer last week that he had seen the tax reform bills filed by incoming Albay Rep. Joey Salceda, Camarines Sur Rep. LRay Villafuerte and Quirino Rep. Junie Cua.
Since all tax laws must emanate from the House, the DOF has yet to seek a sponsor in the Senate, Chua said on the sidelines of last week’s Development Budget Coordination Committee (DBCC) meeting.
But Chua said in an interview early this month that the DOF would likely tap as sponsors whoever would chair the two chambers’ respective committees of ways and means.
Last week, Senate President Vicente Sotto III said in a social media post that incoming Sen. Pia Cayetano had accepted to chair the Senate ways and means committee.
To be refiled in the 18th Congress are the following pending tax reform packages: package 1C raising the motor vehicle user’s charge coupled with the lifting bank secrecy and automatic exchange of information to finally implement a general tax amnesty, the Tax Reform for Attracting Better and High-quality Opportunities bill reducing corporate income tax rates while rationalizing investors’ fiscal incentives, package 2-plus for higher alcohol excise, package three reforming the property valuation system and package four on capital income taxation.
During its first three years in office, the Duterte administration managed to pass two packages, the first of which was the Tax Reform for Acceleration and Inclusion (TRAIN) Act that took effect last year.
The TRAIN law slashed income tax rates but jacked up or slapped new excise on consumption of cigarettes, oil products, sugar sweetened beverages, vehicles and cosmetic procedures, among other goods and services.
Finance Secretary Carlos Dominguez III had said that the TRAIN law generated P68.4 billion in net revenues in 2018, 8.1 percent bigger than the P63.3-billion goal.
For 2019, it is programmed to add P140.6 billion in taxes to government coffers; by 2020, TRAIN revenues will be a higher P195.5 billion, DBCC documents showed.
In February, President Duterte signed into law package 1B under Republic Act No. 11213, or the Tax Amnesty Act of 2019, which paved the way for the ongoing estate tax and delinquencies amnesties.
The DOF had estimated additional revenues from the one-year amnesty on delinquencies to amount to P21.26 billion.
Estate tax amnesty, meanwhile, is expected to generate P6.28 billion during its two-year implementation.
However, the President had vetoed a general tax amnesty pending the lifting of bank secrecy for tax purposes.