ASIAN Development Bank backed the proposed reforms in the excise taxes of automobiles and petroleum products being pushed by the Finance Department, saying these are highly “progressive tax measures” that will help support President Duterte’s 10-point socioeconomic agenda.
ADB president Takehiko Nakao said he agreed with the proposal to adjust the excise taxes on automobiles and petroleum products in a recent meeting with Finance Secretary Carlos Dominguez III, and acknowledged that these were “progressive tax measures.”
ADB said the proposed tax reform program would improve the business environment and sustain further growth, and that revenue losses from the proposed reductions in personal income taxes would be offset by broadening the value-added tax base and increasing oil excise taxes.
“If successfully implemented, the new government’s development agenda to step up spending on infrastructure, implement tax reforms, and cut red tape will sustain high growth rates and increase job creation,” ADB country director for the Philippines Richard Bolt said earlier.
Finance devised a tax reform plan that would make the current system simpler, fairer and more efficient while raising additional revenues for the Duterte administration’s unprecedented public spending on infrastructure, human capital and social protection for the poor.
The first package of the Finance-proposed tax reform program is contained in House Bill No. 4774, which was filed in January by Rep Dakila Carlo Cua, who chairs the ways and means committee.
HB 4774 consists of a significant reduction in personal income tax rates plus a corresponding set of revenue-compensating measures, which include lowering the rates for estate and donor’s taxes, expanding the value-added tax base but retaining exemptions for senior citizens and persons with disabilities, and adjusting automobile and fuel excise taxes.