PRRD hopes tax reform package 2 gets nod by yearend

By Joann Villanueva

July 23, 2018, 8:38 pm

MANILA -- President Rodrigo Duterte on Monday urged lawmakers to approve tax reform measures as he called on all sectors not to prevent their implementation since they would ensure that jobs would be made available to Filipinos.

In his third State of the Nation Address (SONA), the President said he is hopeful for the passage of the second tax reform package by end-2018, pointing out that “this matter is urgent.”

The second package of the Comprehensive Tax Reform Program (CTRP) aims to cut corporate income tax (CIT) and make this in line with counterparts in the region.

The President said the second tax reform package will benefit micro, small and medium enterprises (MSMEs), which account for about 99 percent of entities in the country and employ about 65 percent of workers.

Lowering of taxes for businesses will allow MSMEs to have higher capital and employ more people, he said.

“Enactment of the Package 2 is what stands between today and millions of jobs in the near future,” he said. A bill for the second tax reform package was filed in the House of Representatives last March and the President hopes that a similar measure would be filed in the Senate.

“This matter is urgent. Do not be part of the problem by ignoring it. I hope to sign Package 2 before the year ends. I urge Congress to pass it in a form that satisfies our goals and the interest of the many, not just the wealthy few,” he said.

The President said that by end-July this year, he is optimistic that there will be five tax package measures filed in Congress. “There is no chance we can deliver our promises without an equitable tax system,” he said.

The first package of tax reform, the Tax Reform for Acceleration and Inclusion (TRAIN) Act, was signed into law in December 2017. It cut workers’ income taxes and gave their first PHP250,000 annual income a tax-free rate.

The other tax reform packages target to update taxes on investment products, mining, and alcohol, among others. Duterte said “we cannot and should not” stop TRAIN because this is needed “for sustainable growth that leaves no Filipino left behind.”

“TRAIN is already helping poor families and senior citizens cope with the rising prices. Give me what needs to be given to my countrymen,” he said.

Finance Secretary Carlos Dominguez III said the President “has always been the principal advocate of inclusive growth and of the means to achieve it,” thus, officials of the Department of Finance (DOF) are committed to the deadline mentioned by Duterte in his SONA.

“Tax reform is a key tool to reach that objective. We will extend all the technical support that Congress needs in heeding the President’s call for the passage of Package 2 this year, especially for the benefit of our small and medium enterprises,” he said.

“We believe that the President’s strong statements in the SONA will help allay whatever uncertainty is left about the imperative for reform. The administration is serious about tax reform, and it is definitely serious about having Package 2 signed by the end of the year,” Dominguez said.

“Tax reform will bring about growth with equity and heightened productivity that will help us attain our aspiration to be a high-middle-income country by 2022, lifting one million Filipinos from poverty every year,” he added. (PNA)