Finance Secretary Carlos Dominguez III expressed hope that Congress will heed President Rodrigo Duterte’s call to pass the proposed reforms in the corporate tax system along with the remaining packages of the comprehensive tax reform program within the year.
“We are hoping that the president’s latest pitch for tax reform in his 4th SONA [state of the nation address] would serve as a strong impetus for the members of the 18th Congress to act on the remaining CTRP packages along with the new excise taxes on tobacco and alcohol products before the year is over,” Finance Secretary Carlos Dominguez III said in a statement.
Dominguez also urged Congress to consider the president’s SONA statements against smoking and binge drinking as “a call to action” on passing bills that seek to impose higher taxes on electronic cigarettes and alcoholic drinks primarily as pro-health measures.
Duterte, in his SONA on Monday, criticized smokers and recalled how a curfew was imposed on establishments selling alcohol products in his home city of Davao to compel them to sell liquor only until a specific time.
Dominguez thanked the House of Representatives, led by newly elected Speaker Alan Peter Cayetano, for refiling the Duterte administration’s remaining tax reform bills before the opening of the 18th Congress.
“We will go to the Senate and hope they will also file the same bills so that we can get these passed and benefit the economy as a whole,” Dominguez said.
Dominguez said passing the bill reducing the corporate income tax rate on a staggered basis from the current 30 percent to 20 percent while redesigning the convoluted fiscal incentives system to make it time-bound, performance-based, targeted and fully transparent would help level the playing field for hundreds of thousands of micro, small and medium enterprises and draw in more foreign direct investments which will create more jobs.
The rest of the remaining CTRP proposals include the lifting of bank secrecy laws in fraud cases, the automatic exchange of tax information and adjustments to the Motor Vehicle Users Charge (Package 1b); the increase in the excise taxes on alcoholic drinks and electronic cigarettes (Package 2 Plus); the proposal to broaden the tax base on property taxes by reforming the property valuation system (Package 3); and rationalizing capital income taxation to address the multiple rates and different tax treatments and exemptions on capital income and other financial instruments (Package 4).
“Passing the remaining packages of the comprehensive tax reform program will enhance the modernization of our economy,” Dominguez said.
“Completing the entire tax reform program, as endorsed by the president in his 4th SONA, will also ensure sustainable revenue flow for the government’s infrastructure modernization and human capital development programs while securing our long-term fiscal stability,” he said.