Proposed tax reforms will fund PH economic modernization, DOF says
Congress needs to pass the remaining packages of the Duterte administration’s comprehensive tax reform program (CTRP) to ensure a reliable revenue base that will support the modernization of the Philippine economy, the Department of Finance (DOF) said on Thursday.
In a statement, Finance Undersecretary and DOF chief economist Gil Beltran said the proposed tax reforms—which would result in P187.1 billion in additional revenues and would augment P3.5 trillion in revenues expected to be collected next year—will ensure the equitable sharing of funds for the government’s social and infrastructure programs, while securing fiscal stability long into the future.
These fresh revenues will include P153.8 billion from the first CTRP package or the Tax Reform for Acceleration and Inclusion (TRAIN) law; P15.7 billion from Republic Act No. 11346, which raised excise taxes on tobacco products; and an estimated P20 billion to be collected from Package 2 Plus, which aims to increase excise taxes on alcohol and e-cigarette products.
Package 2 Plus was approved by the House of Representatives on third and final reading last week.
Expenditures for 2020 are expected to reach P4.2 trillion or 19.8 percent of gross domestic product, which translates into a deficit target of P677.6 billion or 3.2 percent of GDP that “is well within the norm for deficit spending,” Beltran said at a briefing by the Development Budget Coordination Committee for senators on Thursday morning.
“The executive branch will continue to be engaged with the legislature in passing the remaining tax reform packages that will generate additional revenue streams for government to fund social amelioration programs,” said Beltran, who represented Finance Secretary Carlos Dominguez III at the briefing.
Beltran likewise pointed out that the passage and implementation of the remaining tax packages and the rest of the fiscal reform agenda would help bring the country to “A” rating territory “within the next couple of years.”
“More importantly, completing our reform programs will further secure our fiscal stability and help fulfill our shared goal of a decent and comfortable life for all law-abiding Filipinos. This means achieving our ultimate goal of bringing down poverty incidence from 21.6 percent in 2015 to only 14 percent by 2022,” Beltran added.
Beltran said the Philippines’ elevation from lower- to upper-middle income country status ahead of schedule next year was proof that the government could accomplish its goal of beating extreme poverty within a generation, “if we stay on course and continue to invest in the right things.”
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