Gov’t to hold Luzon-wide dialogue on tax reform tomorrow

Date Posted : May 17, 2017

Gov’t to hold Luzon-wide dialogue on tax reform tomorrow

Date Posted : May 17, 2017

The Departments of Budget and Management (DBM) and of Finance (DOF) will hold a Luzon-wide dialogue focusing on the social services aspect of the Comprehensive Tax Reform Program (CTRP) tomorrow (May 18) at the Philippine International Convention Center (PICC) in Pasay City.

This PICC gathering dubbed the “Open Government Dialogues” will answer, among others, the following questions about the CTRP: How will the passage of the tax reform proposals in the House of Representatives affect the projected expenditures in 2018? How can the people ensure that the promised expenditures will be realized after the tax reform proposals are passed into law?

According to DOF Undersecretary Karl Kendrick Chua, some 100 representatives of civil society groups and government agencies based in Luzon are expected to attend the forum.

Budget Secretary Benjamin Diokno, Education Secretary Leonor Briones, Chua, Undersecretaries Lilibeth David of the Department of Health and Laura Pascua of the DBM, along with representatives from the US Agency for International Development (USAID), and the Action for Economic Reforms (AER) are expected to speak at the open forum on “Expanding the Social Services thru Tax Reform.”

Diokno said the Open Government Dialogues focusing on the CTRP “aims to contribute to the development of new government action plan that will be more responsive to the needs of the Filipino people.”

The budget chief said that “instituting a progressive tax reform and a more effective tax collection is the second priority in the (Duterte) administration’s 10-point socioeconomic agenda to alleviate poverty and unlock the economic potentials of the country.”

Prior to this Luzonwide dialogue, the Philippine Chamber of Commerce and Industry (PCCI) and USAID have jointly hosted tax reform roadshows in the provinces of Pampanga, Palawan, Cebu, Bohol, Davao and Cagayan De Oro to inform the public of the benefits of the DOF-proposed CTRP and gather their inputs on how to further fine-tune this tax reform plan now pending in the Congress.

House Bill No. 4774 or the Tax Reform for Acceleration and Inclusion Act (TRAIN) filed by Rep. Dakila Carlo Cua, who chairs the House committee on ways and means, contains Package One of the CTRP. The bill aims to lower personal income taxes, along with adjusting the excise taxes on fuel and automobiles and broadening the VAT base, but retaining exemptions on raw food, education and health, and those enjoyed by seniors and persons with disabilities, among other provisions.

A substitute bill, House Bill 5636, that was read at the plenary session of the House ways and means committee last May 15 and referred to the Committee on Rules, had consolidated HB 4774 with 54 other similar tax bills. The substitute bill contained moderate modifications to the original measure said Chua.

HB 5636 earmarks for three years “not more than 40 percent of the yearly incremental revenues generated from the petroleum excise tax” for a “social benefits program” that aims to cushion the impact of the tax reform measure on poor and vulnerable sectors.

Chua said he is hoping that the “moderate modifications” from HB 4774 will be retained in the final version of the substitute bill.

Finance Secretary Carlos Dominguez III said the Duterte administration’s tax reform package would “enable the government to make the country’s tax system more progressive, especially for low- and middle-income earners, and at the same time generate sufficient revenues for unmatched higher spending on infrastructure; on education, health and other forms of human capital development; and on social protection for the poorest Filipinos to cushion the initial impact of the proposed adjustments in consumption taxes.”

Dominguez pointed out that aside from making the country’s tax system simpler, fairer and more efficient, Package One of the CTRP will help the Duterte administration ensure the financial sustainability of its aggressive expenditure program on infrastructure and human capital development in the medium term.

He said this is the linchpin of the government’s “DuterteNomics” or economic strategy to sustain high growth, attack poverty, create jobs and turn the Philippines into an upper middle-income by 2022.

Package One of the CTRP has been endorsed by business associations, foreign chambers of commerce, multilateral development institutions, the former secretaries and undersecretaries of the DOF and the National Economic and Development Authority, and civil society groups.


Date Posted May 17, 2017

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