MANILA-- Finance Secretary Carlos Dominguez III on Wednesday said tax policy reforms are badly needed to update the Philippines' tax system and ensure revenues to finance necessary programs and infrastructure that will sustain economic growth.
In a statement, Dominguez said the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) have put in place several reforms within the first six months of the Duterte administration that can be implemented even without Congress' approval.
These programs include expanding the Large Taxpayers Service (LTS) list to top 3,000 corporations, which provide 75 percent of total tax revenues, from the previous top 2,800 corporations; simplification of forms and procedures for small taxpayers, improvement of the electronic payment system, and enforcing risk-based audits in the BIR.
For BOC, it is now complementing the implementing rules and regulations (IRR) of the Customs Modernization and Tariff Act (CMTA) and is upgrading its electronic system for paperless transaction.
Dominguez said these reforms are needed "but these alone will not be sufficient to generate the high level of revenues needed for the infrastructure buildup and other priority programs to keep the growth momentum and transform the economy into a truly inclusive one."
"This is why tax policy reforms are needed," he stressed.
Thus, Dominguez is thankful to Quirino Lone District Rep. and House ways and means committee chair Dakila Carlo Cua, who recently disclosed that his committee will likely pass within this January the first package of the Finance department's proposed Comprehensive Tax Reform Program (CTRP), which was submitted to Congress in September 2016.
The first package of the CTRP proposes the increase of excise tax on fuel products and vehicles. Its negative impact to the poor was proposed to be countered by targeted cash transfer, among others.
Finance Undersecretary Karl Chua, in a briefing with the House of Representatives ways and means committee on Wednesday, said there is a need to adjust excise tax on fuel because this has not been adjusted for the last 20 years.
He, however, stressed that to offset the impact of the fuel excise tax hike on the poor, the government plans to implement a one-year cash transfer to the bottom 50 percent of the population, which covers 10 million households, four million of which are already beneficiaries of the Pantawid Pamilyang Pilipino Program (4Ps).
The Duterte government targets to increase infrastructure spending from 5.4 percent this 2017, to seven percent in the rest of the current administration's term or until 2022, to lessen poverty and enable the country to be an upper middle income economy by 2022 and a high-income economy by 2014.
"This means there will be no letup in the Duterte administration's commitment to spending on urban and rural infrastructure as a growth driver, to guarantee sustained high and inclusive growth," Dominguez added. (PNA)
Source: Philippines News Agency