ALL packages under the Duterte administration’s Comprehensive Tax Reform Program (CTRP) would have been submitted to Congress by the end of the month, according to the Department of Finance’s (DOF) timeline.
DOF Undersecretary Karl Kendrick T. Chua told financial reporters on Thursday that, by the end of July, all proposals under the CTRP would have been submitted to Congress for assessment and review.
“By the end of the month , all packages [comprising the CTRP would be in] Congress already. We have proposed and prepared everything, so it’s up to them to hear it and pass it as they see fit,” Chua said.
He explained that, while the third and fourth packages of the CTRP are still pending for submission within July this year, other proposals tackling measures under Package 1B, Package 2 and Package 2 plus are already being discussed in both houses of Congress.
“You know, there [would have been] at least six packages already in Congress by August, and we would have submitted all. That’s a big load for Congress,” he added.
He said the DOF is hoping for three measures to be approved by Congress within the year, with two measures under the CTRP, namely Package 1B and Package 2, and the other being the Rice Tarrification Act.
“So it really depends on how Congress will prioritize…but I am very hopeful that at least they pass the three that are already in the hearing stage—the amnesty, the rice tariffication and Package 2. Those three are the minimum that we hope that Congress can pass this year, then the rest can follow,” he said.
Under HB 4904 or the rice-tariffication bill is the proposal to amend the Agricultural Tariffication Act of 1996, prescribing import volumes to be removed and imports to be opened to private entities.
In June the DOF, along with the other members of the Duterte administration’s economic team, had pointed out that the best way to address the rising inflation rate is for Congress to, among others, approve the Rice Tariffication Act as this would bring down prices of rice by around P7 per kilo and reduce inflation to below 4 percent by the second half of 2018.
In the House of Representatives, House Bill (HB) 4815 on estate tax amnesty was passed on final reading last year. Still pending is HB 7105 which focuses on general amnesty. Both amnesty provisions are under Package 1B of the CTRP.
Finance Secretary Carlos G. Dominguez III earlier expressed hope of Congress passing the bills on the amnesty measures by the second half of the year for the government to be able to implement it by April 2019 in time for the tax-paying season.
Measures under Package 1B include increasing the motor vehicle users charge, an estate tax amnesty program, as well as a measure on general tax amnesty, amendments to the bank secrecy law, and automatic exchange of information.
“[The six proposals are] Package 1B which is the amnesty, Package 2, Package 3, Package 4, then there’s 1B for the motor vehicle [users charge], and the last is [Package] 2 plus which is the alcohol, tobacco, mining…,” he said.
Motor vehicle users charge
Chua pointed out that the measure on increasing the motor vehicle users charge is now in the technical working group (TWG) stage in the House of Representatives, with the proposal having three measures: the increase in the rate, organization of the road board, and the road fund reform.
Package 2 of the CTRP, which aims to reduce corporate income tax rates from 30 percent to 25 percent while rationalizing the country’s fiscal incentives regime, was submitted by the DOF to Congress in January this year. The measure is under HB 7458 at the House of Representatives.
Package 2 plus of the CTRP contains measures on further increasing rates for tobacco products as well as alcoholic beverages and mining taxes, among others. The DOF earlier said it is supporting Senate Bill 1599 filed by Sen. Emmanuel D. Pacquiao in terms of increasing tobacco excise tax rates.
SB 1599 proposes to revise the “sin” tax law and double the excise tax on cigarettes from the current P30 per pack to as much as P60 per pack with an annual increase of 9 percent from the initial 4 percent.
“[For] tobacco we are already supporting Manny Pacquiao’s bill, we don’t need to submit. Alcohol we submitted already; it’s being reviewed by both houses; mining we also submitted already, so it’s being reviewed by both houses. We’ll wait for them to review and file,” he added.
Earlier in the month, Dominguez told financial reporters that the DOF will be submitting within the month Packages 3 and 4 of the CTRP, with Package 3 tackling the single valuation for real property, and Package 4 focused on financial taxes.
The finance chief pointed out that both packages are revenue-neutral. Under Package 3, the DOF wants land or property valuation to follow international standards, while the department wants to simplify the number of financial taxes being imposed on financial instruments in the country.
Image credits: Toto Lozano / Presidential Photo