DOF underscores need to pass tax reform measures to support gov’t projects

MANILA(PNA) -- The Department of Finance (DOF) has emphasized the need pass tax reform measure to finance big government programs and projects including infrastructure.

"If we cannot pass tax reform measures, we will be facing difficulties in funding our infrastructure projects," DOF Undersecretary Karl Kendrick Chua said in a Palace media briefing on Friday.

He said House committee on ways and means and Quirino Province congressman Dakila 'Dax' Cua has already filed the Malacanang-proposed tax measure through House Bill No. 4774.

"Our vision with this tax reform is to collect revenues because we have deficit that need to plug. But the real reason here is we want to see our country progress by 2022. We want to reduce poverty rate from 22 percent to 14 percent," Chua said.

"We want to see our country become upper middle income country like China and Thailand and if the reforms will continue, by 2040, we want to eradicate absolute poverty and become high income country like South Korea and Malaysia," he added.

He said if the tax reform measures will be passed, the government can increase the present PHP3.5 trillion national budget by additional PHP1 trillion in 2018.

Chua said the Overseas Development Assistance (ODA) from other countries like Japan and China will not be enough to fund the poverty alleviation programs like the infrastructure gap, education, health and social services.

Chua said the revenues to be generated from tax reform will be used to connect 7,000 barangays and 23,000 sitios to the national roads and irrigate one million unirrigated lands throughout the country.

"We have over 10,000 kilometers asphalt road which would be good if it is concrete and we have more than 32,000 kilometers gravel local roads. We have also 3,700 kilometers national gravel road. If we can repair these, the services will become efficient," he said.

In the education sector, Chua said the government wanted to reach 100 percent enrollment and complete rate aside from needed 100,000 classrooms and almost 200,000 teachers to achieve high quality public education system.

He said the health sector also needs funding to upgrade 700 local hospitals and 18,000 barangay and rural health centers.

"In short, these programs are in-line with 10-point socio-economic agenda of the President. We want simpler, fairer and more efficient tax system that would propel the progress of our country," Chua said.

Under the government tax reform measures, Chua said the Duterte administration proposes to lower the tax rates where 83 percent of taxpayers will benefit.

"For example, right now if your salary is PHP500,000 a year, your tax rate is 32 percent in our tax reform, we will reduce it to 25 percent," he said.

Chua said the VAT (value added tax) system will also be corrected to prevent 'huge leakage."

He said the oil excise tax will be increased by PHP6 per liter over the period of next three years.

"Our first proposal is to increase the oil excise tax by PHP6 per liter because it did not move for the last 20 years. But we listened to the stakeholders, so what we will do is the increase will be staggered. PHP3 this year, PHP2 next year and additional PHP1 in 2019," he explained.

Chua said the automobile excise tax will also be reformed where in luxury vehicles will have higher tax.

"It's net effect to our revenue is we will give PHP139.6 billion in the form of lower income tax but we will recover it through VAT and excise tax to fuel and automobile. But it was designed to become very equitable where the rich will have to pay more and the poor will pay lower tax," he explained. (PNA)

Source: Philippines News Agency

Related posts