TAX reforms are needed to bankroll government’s various social services, Senator Pia Cayetano said Wednesday, as Congress is poised to pass enabling bills providing upward adjustments in existing tax rates.
Cayetano, who chairs the Senate Ways and Means Committee tasked to endorse additional tax impositions, said “improving the government’s delivery of services to Filipino families is the primary goal of reforming the country’s tax measures.”
Fielding questions at the Kapihan sa Manila Bay media forum, Cayetano clarified that “we are passing taxation measures not because it is being imposed upon us by any international body.”
She added: “We’re in a position where we are cleaning up our [own] house, not because we have to but because it’s the best thing to do.”
The Ways and Means panel is currently tackling the Malacanang-endorsed Comprehensive Tax Reform Program (CTRP) to supplement the Duterte government’s effort to achieve its targets under the United Nations’ Sustainable Development Goals (SDGs), its own development plan, and to fill the requirements of the recently enacted Universal Healthcare law. .
The CTRP includes proposals seeking to lower the corporate income tax (CIT) and rationalize tax incentives of businesses (Package 2); impose higher excise taxes on alcohol products and e-cigarettes (Package 2+); reform the property valuation system (Package 3); and rationalize capital income taxation (Package 4).
At the forum, the senator confirmed plans for her committee to conduct a hearing every week to tackle the Palace-endorsed revenue-raising measures. The bill on higher excise taxes on alcohol is set to resume next week, to be followed by two to three more hearings on e-cigarettes and vape products. “I want to be sure that all stakeholders have a chance to be heard on record,” Cayetano said.
She said her primary duty as Ways and Means chief is to ensure that the Duterte government will generate enough revenues to fund its social services on health, education and the environment, including the so-called Package 2+ that, she said, seeks to bridge the current funding gap of the Universal Health Care Program.
“Our UHC program is moving forward. But I really want to see it further funded,” said Cayetano. “That’s where my passion is coming from to make these [tax reforms] happen. We want to be able to help our people feel the effects [of UHC].”
Cayetano added: “At the end of the day, taxation is not just to raise funds. It’s also to protect the health of Filipinos.”
In the same forum, Cayetano indicated she is also set hold hearings to tackle proposals to lower corporate income taxes and rationalize incentives granted to attract investors. “We have one of the highest tax rates in corporate Asia. That paints a not very inviting picture to investors. If we want to be competitive with our Asean neighbors, one thing that we can do is to reduce the corporate income tax rate,” the Senator added.
She cited reports that government was losing revenues due to the “gaps in our policies on granting incentives” to different businesses.
“We have so many agencies offering different kinds of [incentives] packages,” the senator noted, adding, “Tayo lang pala ang may [It turns out we’re the only ones who have] forever.” She pointed out that “in other countries, they put a timeline. And despite our incentives, we are still not the go-to place of investors in Southeast Asia.”
According to Cayetano, her committee will also tackle Package 3 of the CTRP introducing reforms to develop “a just, equitable, and efficient real property valuation system,” noting that the country’s “outdated property valuation system is impairing our ability to conduct business well.”