Fifteen foreign and local business organizations have appealed to Malacanang and the Congress to give top priority to the Comprehensive Tax Reform Program (CTRP) and 11 other legislative proposals that aim to improve the country’s investment climate, create more jobs, sustain the growth momentum and clear the way to economic inclusion.
In a letter to Executive Secretary Salvador Medialdea, these organizations belonging to the Philippine Business Groups – Joint Foreign Chambers (PBG-JFC) said they believe the CTRP and the other economic reform measures they have recommended for swift approval by the legislature are all “in line with the 10-point socioeconomic agenda of the Duterte administration.”
Alongside the CTRP, the 15 business groups also urged Malacanang to include, among others, the lifting of the constitutional restrictions on foreign ownership limits and amendments to the Bank Secrecy Law in its priority agenda for discussion in the next meeting of the Legislative-Executive Development Advisory Council (LEDAC).
These PBG-JFC member-organizations also called for the swift approval of the following proposed legislation now pending in the Congress: reforms in the Apprenticeship Program implemented by the Technical Education and Skills Development Authority, amendments to the Build-Operate-Transfer law, the Freedom of Information bill, amendments to the Corporation Code, reforms in the telecommunications sector, the Water Sector Reform Act, amendments to the Public Service Act, emergency powers to address the traffic and transportation crisis and amendments to the Retail Trade Liberalization Act.
“All constitute reforms that will improve the business and economic climate of the Philippines and result in more investments, jobs, and inclusive growth,” read the letter, a copy of which was furnished Finance Secretary Carlos Dominguez III.
The 15 representatives of the business chambers and associations who signed the letter were: Ernesto Ordonez, chair of the Alyansa Agrikultura; Bruce Winton, president of the American Chamber of Commerce of the Philippines, Inc.; Tom Grealy, president of the Australia-New Zealand Chamber of Commerce of the Philippines, Inc.; Nestor Tan, president of the Bankers Association of the Philippines; Julian Payne, president of the Canadian Chamber of Commerce of the Philippines, Inc. ; Guenter Taus, president of the European Chamber of Commerce of the Philippines, Inc.;
Benedicta Du Baladad, president of the Financial Executives of the Philippines; Calixto Chikiamco, president of the Foundation for Economic Freedom; Ike Amigo, president and CEO of the IT and Business Process Association of the Philippines; Yoshio Amano, president of the Japanese Chamber of Commerce of the Philippines, Inc.; Ho-Ik Lee, president of the Korean Chamber of Commerce of the Philippines, Inc.; Edgar Chua, chairman of the Makati Business Club; Marife Zamora, president of the Management Association of the Philippines; Dan Mollov, president of the Philippine Association of Multinational Companies Regional Headquarter Inc.; and Danilo Lachica, president of the Semiconductor and Electronics Industries in the Philippines, Inc.
Relaxing the provisions of the bank secrecy law for tax fraud cases is actually one of the complementary measures to the CTRP that the Department of Finance (DOF) has proposed to the Congress in endorsing House Bill No. 4774, which covers the first package of this DOF tax reform plan.
Rep. Dakila Carlo Cua is the author of HB 4774 and chairperson of the House ways and means committee, which has started public hearings on this CTRP bill.
Package 1 of the CTRP aims to lower personal income tax rates as well as donor and estate taxes while adjusting the excise rates for automobiles and petroleum products, and expanding the VAT base but retaining exemptions enjoyed by senior citizens and persons with disabilities.
Further reforms being considered by the Congress to complement HB 4774 include imposing a tax on sugar-sweetened beverages, indexing the motor vehicle user’s charge to inflation, and granting an amnesty to past estate tax cases.
HB 4774 also includes legislated administrative reforms in the Bureaus of Internal Revenue (BIR) and of Customs (BOC), such as the adoption of a fuel marking and monitoring system to prevent oil smuggling–not only to collect the correct taxes but also to ensure that only high-quality petroleum products and not adulterated fuel are sold in the market–along with the use of e-receipts, and the mandatory link of the point-of-sale (POS) systems of establishments directly to the BIR.
The CTRP has gained the support of 14 former DOF secretaries and undersecretaries plus five former NEDA directors-general, who released a month ago a joint manifesto stating that the tax reform plan would “correct the structural weaknesses” of the country’s system and serve as a tool to decisively attack poverty and achieve inclusive growth.
Signing the joint manifesto were ex-DOF Secretaries Cesar Virata, Jose Isidro Camacho, Jesus Estanislao, Roberto De Ocampo, Jose Pardo, Cesar Purisima, and Juanita Amatong; ex-NEDA chiefs Arsenio Balisacan, Emmanuel Esguerra, Cielito Habito, Felipe Medalla, and Romulo Neri; and former finance undersecretaries Romeo Bernardo, Cornelio Gison, Lily Gruba, Milwida Guevara, Jose Emmanuel Reverente, and Florencia Tarriela.
Former Finance Secretary Margarito Teves has also separately expressed his support to the CTRP during a recent hearing of the House ways and means committee.
Dominguez has stressed that tax reform is indispensable to the government’s goal of investing some P1 trillion more each year on top of the current P1.3 trillion it plans to spend on infrastructure, education, health, social protection, and other programs necessary to create enough decent-paying jobs for, and improve the living standards of, Filipinos and at the same time make the Philippines more globally competitive and attractive to foreign investments.
“A simpler, fairer, and more efficient tax system is needed to promote investment, create jobs, and reduce poverty,” Dominguez said.
“The general rule in crafting the Duterte administration’s income tax reform plan is that the rich will have to pay more while poor and low-income Filipinos will pay less or none at all,” he said.
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