THE Mindanao Business Council Inc. (MBCI) has given its full support to the comprehensive tax-reform program crafted by the Duterte administration, saying the reform package is a step to achieving the country’s full economic prosperity by 2040.
MBCI Chairman Vicente Lao said President Duterte’s vision of significantly reducing poverty by 2022 and completely eradicating it by 2040, or 24 years from now, is a goal to aspire for.
“[It] is a dream we share and we will commit to working toward it,” he said.
Lao pointed out that the MBCI is one with the Department of Finance (DOF) in making the tax system simpler, fairer and more efficient, which would be achieved by the first package of reforms it had submitted to Congress in September.
This first package involves reducing personal income-tax (PIT) rates, expanding the tax base and adjusting the excise taxes on petroleum products and automobiles, with certain exceptions.
The MBCI said in a news statement that, “as partners for change, we, the MBCI, fully support the Duterte Administration’s comprehensive tax-reform program, spearheaded by the DOF.”
“We believe that the program, comprising several packages beginning with the first package submitted to Congress in September 2016, will simplify and correct the inefficiency and inequity of our tax system. More important, we believe that the CTRP [comprehensive tax-reform package] is fiscally sound, responsible, and will address the development needs of our country, which are particularly acute in Mindanao,” the MBCI added.
The MBCI also called for the support of the Filipinos in pushing for the comprehensive tax-reform package as it will be “economically transformative for the country.”
“The long-delayed development of Mindanao can be attained by securing peace and investing in the future, particularly rural development. These are at the heart of Duterte’s economic policy, which we continue to support and seek to advance,” the group added.
It pointed out that the proposed PIT reduction “is immediately needed and rightfully deserved by the Filipino taxpayer, as this will provide due relief for the middle and lower-income classes and spur consumption, the effects of which we hope to feel immediately in Mindanao.”
Lao added that the Mindanao business community is also backing the DOF’s proposal to broaden the value-added tax (VAT) base by reducing unnecessary exemptions and “insidious sources of revenue leakage.”
“Many of our VAT exemptions aim to protect vulnerable sectors, but we are in agreement with the DOF that these sectors must be protected through more targeted and effective means, and not through the tax system, which benefits the rich far more. Most importantly, rationalizing VAT exemptions will improve compliance and contribute to ease of doing business,” the MBCI said.
In earlier reports, Finance Secretary Carlos G. Dominguez III has assured the public that the tax-reform plan will not only raise revenues to fund the country’s infrastructure requirements and investments in human capital, but also aims to protect vulnerable sectors, comprising the poorest 50 percent of the population, from the impact of the government’s revenue-enhancing measures.