PRESIDENT Duterte’s proposed tax reform package and its viability will be scrutinized thoroughly by the House of Representatives, Speaker Pantaleon Alvarez has said.
“We are currently studying it [tax reform package] if it’s doable,” Alvarez told reporters after attending the super majority caucus he called for lawmakers to speed up the approval on second reading of next year’s P3.35-trillion General Appropriations Bill (GAB), adding the proposal to lower personal income tax (PIT) will undergo thorough scrutiny.
The Department of Finance submitted the administration’s tax reform package to the House committee on ways and means chaired by Quirino Rep. Dakila Cua which includes proposals to impose additional taxes on several commodities and remove the value-added tax exemptions of senior citizens and persons with disabilities to make up for the estimated P179 billion in foregone revenues from the planned lowering tax rates.
The DoF also proposed to expand VAT from 12 to 14 percent and remove exemptions replacing the same with direct subsidy.
Cua, for his part, admitted the proposal to adjust the excise taxes on petroleum products will make the prices of food, basic commodities and transport fare to shoot up.
Cua was quick to say his panel would verify the position of the Department of Finance (DoF) based on the tax reform package it submitted to his panel if indeed the impact is only minimal.
“I haven’t had a study, but in ordinary logic I guess it will have an adverse effect… I don’t know the substantive effect on how much it will cost to food and transportation. According to DoF, (it’s) 1.2 percent, so it is going to be a minimal effect, [but] that’s what we have to validate,” said Cua.
He based his comment on the DoF plans to raise the excise tax on gasoline to P10 per liter from P4.35 per liter, and diesel – which is currently at zero– to P6 per liter.
Cua said his panel will scrutinize carefully the DoF’s proposed tax reform package so they will be able to find ways to cushion its effects on the poor.
The DOF proposal covers the restructuring of the excise tax on automobiles except for buses, trucks, cargo vans, jeeps, jeepney substitutes and special purpose vehicles.
