President Duterte’s chief economic manager on Monday reiterated the need to pass the rest of the tax reform packages pending in the Senate to ensure fiscal sustainability amid a prolonged pandemic.
In the Duterte administration’s comprehensive tax reform program, still pending in Congress were the passive income and financial intermediary taxation bill; real property valuation and assessment reform; higher motor vehicle user’s charge; a new mining tax regime; and general tax amnesty with lifting of bank secrecy for tax fraud cases and automatic exchange of information. These had already been passed by the House of Representatives.
“Tax reform is extremely difficult to get approved in the legislature. Yet, you all took the challenge and delivered resoundingly on this task to help accelerate poverty reduction and attain the President’s promise of genuine change. It is through your hard work and dedication that made our success in passing the tax reform packages possible,” Secretary Carlos Dominguez III told Department of Finance (DOF) personnel during their online 124th anniversary celebration.
The DOF spearheaded the recent passage of the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE), which slashed firms’ income tax rates while rationalizing the fiscal perks that investors enjoyed.
It also led the passage into law of the Tax Reform for Acceleration and Inclusion Act (TRAIN), which rationalized personal income tax rates while slapping new or higher taxes on consumption; the ongoing delinquencies and estate tax amnesties; as well as higher “sin” taxes on alcohol, tobacco and e-cigarette products.
Albay Rep. Joey Salceda, who chairs the Lower House’s ways and means committee, told the Inquirer over the weekend that passage of pending bills in the Senate will help the DOF in its plan to wind down the national government’s ballooning debt starting 2022.
The government had been ramping up borrowings to finance the protracted fight against the health and socioeconomic crises inflicted by the COVID-19 pandemic.