New tax measures seen to generate P47B annually


The House of Representatives on Tuesday approved on second reading three priority tax measures that would generate at least PHP47 billion in new revenues annually.


During the plenary session, the chamber approved House Bill 4102, which seeks to impose an excise tax of PHP100 per kilo of disposable plastic bag; House Bill 4122, which seeks to impose a 12-percent value-added tax (VAT) on foreign digital service providers (DSPs); and House Bill 4339 or the proposed Package 4 of the Comprehensive Tax Reform Program.


House Ways and Means committee chair Joey Salceda, principal author and sponsor of the measures, said the VAT for nonresident DSPs is expected to yield some PHP19 billion, the single-use plastic bags tax would yield PHP9.3 billion, and PHP20 billion from Package 4, the bulk of which will come from removing the tax exemption in pickup trucks, and increasing the tax rates on foreign currency deposit units to 20 percent.


He noted that this is around 2 percent of the collection targets of the Bureau of Internal Revenue (BIR), and 0.2 percent of the country’s gross domestic product (GDP), adding that Finance Secretary Benjamin Diokno only needs to look for 0.1 percent of GDP more in tax collection improvement.


He said the medium-term fiscal framework takes into account 0.3 percent of GDP in tax collection efficient improvement every year.


“With this, the House wraps up with all the priority tax measures of the Duterte-era Comprehensive Tax Reform Program, and is ready to move on to tax collection reforms, as prioritized by the Marcos administration,” Salceda said.


He clarified that the VAT on digital services in the country will not be imposed on Filipino businesses.


“The emphasis is on foreign or nonresident digital service providers. All major Asean economies impose VAT on these entities. Tayo na lang ang hindi (We’re the only ones who haven’t done it),” Salceda said.


Meanwhile, he said the plastic bags tax is in line with the country’s efforts to fight ocean pollution, especially “as we are now recognized ignominiously as the world’s biggest ocean plastic polluter.”


For Package 4, he said the lifting of the exemption on pickup trucks merely corrects an “unfair privilege” on a vehicle that is mostly for the rich, occupies very large space on the road, and is “by all accounts less fuel-efficient” than most other vehicles.


The tax measures are expected to be approved on final reading at the lower chamber by Monday or Tuesday next week


Source: Philippines News Agency