The main authors of the Comprehensive Tax Reform Program (CTRP) in the Congress said their combined proposals to convert the current tax system into a more progressive one will help unlock the full potentials of the Philippine economy and ensure a brighter future for the country’s young Filipinos.
Quirino Rep. Dakila Carlo Cua, who filed the first package of the CTRP as House Bill No. 4774 in the House of Representatives, sought the help of the business community and other sectors in generating widespread public support for the tax reform plan, which aims not only to lower personal income tax rates but to also make the tax system simpler, fairer, equitable and more progressive through several policy and administration reform measures.
Cua, who chairs the House ways and means committee, said tax reform will empower ordinary Filipinos to make quality choices in life, such as where to send their kids to school and how they would want to chart a future for themselves and their families.
“This is what we are trying to do here. We may talk about and debate the details of the bills on how to achieve the revenues that we want. We may talk about what taxes we want to impose and what to exempt. But at the end of the day, let’s not lose focus. This is about our future, about the next generation, and like what (Rep.) Joey (Salceda) said this is about unlocking the (potentials) of the economy of the Philippines,” said Cua at the final leg of the tax reform roadshow organized by the Philippine Chamber of Commerce and Industry (PCCI) and the United States Agency for International Development (USAID).
His senior vice chair in the House ways and means committee, Albay Rep. Joey Salceda, also pitched in his support for the CTRP and said he “trust[s] the President and his team” to do well in implementing this tax reform program.
Salceda, who filed a separate tax administration reform measure–House Bill 4888—that complements Cua’s HB 4774, said the proposed CTRP “is our best chance” of ensuring a stable future for the country’s future generations.
“I trust the president and his team to do well by this. If that trust is not there, I wouldn’t even put my name on it,” Salceda said. “So this is our best chance and let’s give it our best shot. A little love for the country and that’s all we need.”
Sen. Sherwin Gatchalian, the vice chairperson of the Senate ways and means committee, said at the same tax forum that the CTRP is a “work in progress,” which the Senate will deliberate on thoroughly to “make sure that the impact on our constituents will be worth it.”
Cua’s bill is called the “Tax Reform for Acceleration and Inclusion Act or TRAIN, while Salceda’s HB 4888 is the Tax Administration Reform Act or TARA.
The information drives organized by the PCCI and USAID across the country to educate the people on the merits and advantages of these tax reform measures have been dubbed the “TARA na sa TRAIN” workshops.
Finance Secretary Carlos Dominguez III has underscored the importance of public diplomacy to win popular support for the CTRP by convincing ordinary Filipinos that an overhaul of the outdated tax system is the “key link” to “redeeming the country’s future.”
Dominguez noted that previous secretaries and undersecretaries of the DOF have endorsed this tax reform package, along with multilateral institutions such as the World Bank, the International Monetary Fund, and the Asian Development Bank.
The Philippines’ development partners, as well as several reform-oriented civil society groups, have also expressed their support for the CTRP, he said.
But even if the CTRP has secured the support of an increasing number of institutions and organizations, Dominguez said, “It is the man-on-the-street we now need to win over. This man-on-the-street is susceptible to populist and free-rider arguments put forward by groups that oppose any and all reforms in taxation.”
The CTRP, he said, will sustain the pace of growth to 7 percent or better, bring down the poverty rate to 14 percent in the medium term and pave the way for the country to become a high-income economy by 2040.
Dominguez said that “If we fail to raise the volume of revenues required for our economy to break out over the next few years, we will fail in everything else.”
“We will fail to close the infrastructure gap. We will fail to make the investments in our young to prepare them for meaningful economic participation. We will fail to catch up with our neighbors in the region who have invested twice the amount than what we did on infra over the past three decades. Most important, we will fail to bring down the level of poverty afflicting our people,” he said.
DOF Undersecretary Karl Kendrick Chua has pointed out in the House ways and means committee hearings that the proposed CTRP will allow the government to build or improve 44,000 kilometers of national and local roads, construct more local hospitals and improve existing ones, and achieve the ideal teacher-to-student and student-to-classroom ratios for the benefit of the country’s future workforce.
He further said that some P48 billion will be earmarked for targeted transfer programs for low-income groups and other vulnerable sectors to shield them from the initial impact of the CTRP.
The CTRP will also fund the construction of 113,553 more classrooms and the hiring of 181,000 more teachers for the public school system over the next five years, he said.
He said the CTRP will likewise help attain 100 percent PhilHealth coverage, build 25 more local hospitals and upgrade 704 existing ones, on top of also improving 263 rural and urban health centers, constructing 8,412 new barangay and rural health centers; hire an additional 2,424 doctors, 39,466 nurses, 2,862 medical technologists, 1,090 dentists, 911 public health associates, 2,497 Universal Health Coverage implementers, and 3,288 pharmacists between 2017 and 2022.
Among the projects to be funded by the CTRP are the Bonifacio Global City-Ortigas Center Link Road Project, UP-Miriam-Ateneo Viaduct along C-5/ Katipunan Avenue, Metro Manila Priority Bridges Seismic Improvement Project (Guadalupe Bridge and Lambingan Bridge), and the Widening/Improvement of Gen. Luis St.-Kaybiga- Polo-Novaliches Road.
The other projects to be funded by the CTRP are the Arterial (Plaridel) Road Bypass Project Phase III, Central Luzon Link Expressway, Phase II in San Jose, Nueva Ecija, Pasig-Marikina River Channel Improvement Project, Phase IV, MarikinaDam, Flood Protection Works in the Marikina River including Retarding Basin, Flood Mitigation Project in the East Mangahan and the Floodway Area (Stage 1) and several major flood control projects.
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