The Finance Department expressed optimism the proposed Comprehensive Tax Reform Program will be passed into law by the middle of 2017.
Finance Undersecretary Karl Kendrick Chua said the agency would work hard with Congress to ensure the passage of the priority bill before the budget cycle started in June.
“Our target is hopefully by middle of the year. Because once we exceed the middle of the year, the budget cycle starts… So we will work very hard before the cycle starts,” Chua said during the Economic Journalists Association of the Philippines’ seminar sponsored by San Miguel Corp. in Subic Bay Freeport over the weekend.
Package one of CTRP is outlined in House Bill. No. 4774 that aims to lower personal income tax rates for 99 percent of the country’s taxpayers while expanding the value-added tax base and adjusting rates for consumption taxes such as the excise tax on petroleum products and automobiles, among other revenue-enhancing measures. VAT exemptions for seniors and persons with disabilities will be retained under the bill.
The second package aims to reduce the corporate income tax to 25 percent, coupled with fiscal incentives rationalization. The third is about property taxation, while the fourth one is on financial or capital income taxation.
Chua said he was hoping the second package could be passed in the second half of the year. “We estimate that by middle of the year, we will be finished with the data analyses, so we are looking at the second half of the year,” he said.
Albay Rep. Joey Salceda, who is supporting the DoF’s tax reform plan, said in the same EJAP seminar that the passage into law of the bill could make the Philippines a “better place” and enhance the country’s global competitiveness.
He said once CTRP was approved this year, the credit rating outlook of the Philippines from major global rating agencies might improve from stable to positive.
Finance Secretary Carlos Dominguez III said much could be lost if the government failed to seize the opportunity to change the obsolete taxation system.