THE Department of Finance (DOF) has moved back the submission of its proposed Comprehensive Tax Reform Program (CTRP) Package 2 Plus by another two weeks in February, according to Finance Secretary Carlos G. Dominguez III.
“There will be a delay of about two weeks. We are still formulating the Package 2 Plus [and] we are still in consultation with the people who filed bills,” Dominguez told financial reporters.
CTRP Package 2 Plus aims to reform the country’s current tax schemes for tobacco and alcohol products, casinos, mining and coal was originally scheduled for submission within the month.
Last week the DOF said it will be submitting by the end of this month its Package 2 proposal, which includes measures tackling taxes on sin products, namely, tobacco and alcoholic products, mining, coal and casinos.
Earlier in the month, the department had also submitted its Package 2 to Congress, which aims to slash corporate income-tax rates to 25 percent, from the current 30 percent, as well as harmonizing the country’s fiscal incentives.
“Actually, what they only adjusted is the cigarette tax, so there is still the alcohol tax that has not been reviewed. And according to the original sin tax law, that should have been reviewed by Congress,” Dominguez added.
The Tax Reform for Acceleration and Inclusion (TRAIN) Act, which is Package 1 of the CTRP, aims to cut personal income-tax rates and implement a number of offsetting measures, such as increasing taxes on fuel and automobiles. The government had also included provisions on taxing tobacco and coal.
Under Package 1A, the increase in coal excise tax, which was originally proposed to be included in the DOF’s fifth package of the CTRP, was raised from the current P10 per metric ton (MT) to P50 per MT in the first year of implementation, P100 in the second year and P150 in the succeeding years.
The increase in tobacco excise-tax rates was also included, from the current P30 per pack to P32.5 in the first half of this year and to P35 starting July 2018 to December 2019.
The finance chief said Congress is finalizing the other half of the TRAIN dubbed as Package 1B, tackling tax-administration measures, as well as tax amnesty and lifting of the bank secrecy law, with plans to pass the measure by March this year.
The DOF is currently in discussions with Sen. Emmanuel D. Pacquiao who sponsored Senate Bill (SB) 1599 and Sen. Joseph Victor G. Ejercito for his SB 1605, which are both aimed at increasing excise-tax rates for tobacco products.
SB 1599 proposes to double the excise tax on cigarettes from the current P30 per pack to as much as P60 per pack this year, with an annual increase of 9 percent from the initial 4 percent.
Sponsored by Ejercito, SB 1605 proposes to increase the price of cigarettes to as much as P90 per pack this year, followed by a 9 percent increment yearly. The increase was aims to augment the country’s coffers with P80 billion to P90 billion on the first year of implementation alone.
“They [the senators] are talking about things like different kind of packaging for the cigarettes, plain packaging for the cigarettes,” Dominguez said.