The Finance Department said Thursday it will submit to Congress early next year a “healthy tax” package, which includes imposing tax on sweetened drinks and raising excise taxes on alcohol and tobacco, to supplement the initial tax package it proposed early this week.
Finance Undersecretary and chief economist Karl Kendrick Chua said “Package 1B” would represent the second phase of Package 1 of tax reforms submitted to the House ways and means committee Monday.
Chua said Package 1B would be a tax reform for “healthy Philippines.”
“Yes, it is going to be a healthy tax. It is a tax reform for healthy Philippines, on alcohol, tobacco and the sweetened beverage,” Chua said at the sidelines of a tax reform forum in Makati City.
The first package submitted by the Finance Department to Congress included the reduction of the personal income tax rate from 32 percent to 25 percent, except for high income earners who would be taxed a high of 35 percent; the expansion of the value added tax base limiting the exemptions on raw food, education and health and limiting the VAT zero-rating to direct exports; adjustment in the excise rates of petroleum products to account for the effect of inflation; and the restructuring of the excise tax on automobiles.
Chua said phase two of package one would be submitted early next year, following the maturity of the sin taxes slapped on alcohol and cigarette products.
The Finance Department also plans to expand the tax amnesty program to bring more taxpayers back into the system.
Finance Secretary Carlos Dominguez III said he would propose a tax amnesty program that would cover real estate taxes, estate taxes, regular taxes including income and value-added taxes and tax cases.
Dominguez said the agency would get the legislated authority to settle at least 40 percent or whatever was the desired amount to clear up all the tax cases.
Chua said the agency was still formulating the proposal which would complement the initial tax reform proposal it submitted to Congress.