The Senate is “ready” to heed the call of Finance Secretary Carlos G. Dominguez III to pass the remaining packages of the comprehensive tax reform program within 15-18 months.
“I’ve always been a hard worker and my main job is to provide the information that my colleagues need to be able to make informed decisions. I’m ready to do it,” Senate ways and means committee chair Pia Cayetano told the Inquirer Wednesday when asked if the Finance chief’s timetable was doable.
Cayetano said “15 to 18 months—if you have regular hearings, that’s a good time. But I don’t want to give the impression to my colleagues that I’m rushing them. I want them to know that I will be available to have these hearings. And I know the DOF [Department of Finance] people have made themselves available to give technical briefings.”
Last week, Dominguez said the DOF wanted the pending tax reform packages tackled in Congress and passed within the next 15-18 months—before legislators get busy with their preparations for the 2022 national elections.
“That is our target because realistically speaking once you hit 2021…everybody starts focusing on something else,” he said.
The pending tax reform packages had been refiled in the 18th Congress by House ways and means committee chair and Albay Rep. Joey Salceda, Camarines Sur Rep. LRay Villafuerte and Quirino Rep. Junie Cua as tax measures had to emanate from the lower chamber.
The remaining packages included package 1C, raising the motor vehicle user’s charge coupled with lifting bank secrecy and automatic exchange of information to implement general tax amnesty; package 2 known as the Tax Reform for Attracting Better and High-Quality Opportunities (Trabaho) bill, reducing corporate income tax rates while rationalizing fiscal incentives for investors; package 2 plus for higher excise on alcoholic products, heated tobacco and vapor products; package 3 reforming the property valuation system, and package 4 on capital income taxation.
President Duterte green-lighted three tax packages, including the Tax Reform for Acceleration and Inclusion (TRAIN) Act that took effect last year.
The TRAIN law slashed personal income tax rates but jacked up or slapped new excise taxes on consumption of cigarettes, oil, sugary drinks, motor vehicles and cosmetic procedures, among others.
In February, the President signed into law package 1B under Republic Act (RA) No. 11213 or the Tax Amnesty Act of 2019, paving the way for the ongoing estate tax and delinquencies amnesties.
Last month, Duterte signed RA 11346 which further jacked up cigarette excise and imposed levies on e-cigarettes and vapes.
The proposal for a comprehensive tax reform program was first espoused by Dominguez’s predecessor, Cesar V. Purisima, who before the end of the Aquino administration pitched the DOF’s plan, only to be rejected, as it came too close to campaign season for the 2016 national elections.
While the proposal to cut personal income tax rates would appeal to voters, it was feared that slapping higher levies—including hiking the value-added tax (VAT) rate to 14 percent—would shed votes for the then administration bet Mar Roxas, as what had happened to Ralph Recto who lost his Senate reelection bid after he sponsored the VAT increase to 12 percent years back.
The Sin Tax Reform of 2012 was the only tax measure passed under the Aquino administration.