FINANCE Secretary Carlos G. Dominguez III prodded lawmakers to pass the remaining packages of the Comprehensive Tax Reform Program (CTRP).
Dominguez told reporters lawmakers can do this since a lot of the packages are in the final stages already.
“There are two more periods; [these] four weeks, and we have another period after the elections, which is another four weeks, we have eight weeks. A lot of the packages are already in the late stage and are ready to go,” Dominguez said. “Sure we understand there are problems in the budget, but that can be approved in a day if you want.… There’s a lot of work that has been done already, so we can do it.”
He said that passing the second package, which is the Tax Reform for Attracting Better and High-Quality Opportunities (Trabaho) bill, will benefit their constituents or the Filipino people.
“If they actually think about it, it’s [Trabaho] actually good. Can you imagine you are giving a tax break to 99 percent of the corporations in the Philippines by reducing the CIT [corporate income tax] from 30 percent down to 25 percent; that is a big incentive for the people,” he added. “If you think about it that way you should be able to pass it in a flash.”
Early in the month, the Department of Finance (DOF) acknowledged the proximity of the May elections may dim hopes of getting the remaining packages under the CTRP passed under the 17th Congress. Still Dominguez said he remains optimistic all packages will be passed before the year ends.
The 17th Congress adjourned session last December 15 for its traditional year-end break and resumed session on January 14. It will adjourn again on February 9 and resume session on May 20, after which it will adjourn sine die on June 8.
The remaining packages under the CTRP include:
- Package 1B in line with the reforms in the Motor Vehicle Users’ Charge;
- Package 2 on reducing the corporate income tax, as well as instituting reforms in the country’s fiscal incentives system, with the Trabaho bill pending in the Senate;
- Package 2 plus, proposing additional excise tax on tobacco and alcohol products, as well as an increase in the government’s share from mining;
- Package 3 covering reforms in property valuation, which will adopt the Schedule of Market Values as single valuation base for national and local property taxation; and,
- Package 4, which is meant to rationalize capital income taxation to address the multiple rates and different tax treatments and exemptions on capital income and other financial instruments.
Dominguez wants lawmakers to place Package 2 in the front burner. It was certified as an urgent and priority measure by President Duterte last year.
“This is a big benefit to the business community,” he said. “This will benefit the small guy running the business.”
On Monday, it was reported that the Philippine Economic Zone Authority (Peza) registered a 41-percent decline in investment approvals for 2018 amounting to P140.24 billion from the P237.57 billion in 2017, as firms held on to their capital in anticipation of the rationalization of tax incentives.
Peza Director General Charito B. Plaza attributed the double-digit decline to the uncertainties brought about by the Trabaho bill, pointing out that potential investors held on to their capital to wait for the final provisions of the measure, while existing locators postponed their expansion plans in fear that their tax perks could be removed soon.