Fiscal reforms to generate P75B in new revenues: House leader

By Filane Mikee Cervantes

August 24, 2022, 7:46 pm

<p>Albay Rep. Joey Salceda<em> </em></p>

Albay Rep. Joey Salceda 

MANILA – A House leader on Wednesday said the committee-approved fiscal reforms would secure at least PHP74.9 billion in new revenues for the administration of President Ferdinand Marcos Jr. once enacted into law.

Albay 2nd District Representative Joey Salceda, House ways and means committee chair, said his panel has completed all priority tax measures of the Marcos administration.

"As of today, the committee has already approved measures that would amount to at least PHP74.9 billion in new revenues over the next year," Salceda said.

During Wednesday's virtual hearing, the panel approved the proposed Package 4 of Republic Act 10963, also known as the “Tax Reform for Acceleration and Inclusion (TRAIN) Law.”

The measure, formerly known as the proposed Passive Income and Financial Intermediary Taxation Act (PIFITA), aims to make the taxation of passive income, financial intermediaries, and financial transactions simpler, fairer, more efficient, and regionally more competitive.

It would amend certain sections of RA 8424 or the National Internal Revenue Code (NIRC) of 1997, as amended, to reduce the documentary stamp tax (DST) imposed on lotto tickets from PHP0.20 to PHP0.10.

Salceda explained that while this could cause revenue losses to the government, the measure would aid in ensuring that the Philippine Charity Sweepstakes Office’s (PCSO) revenue does not collapse due to skyrocketing ticket prices in the long run.

"Package 4 of the Comprehensive Tax Reform Program, the core of which is PIFITA, will generate PHP25.7 billion in new revenues," he said.

The panel also agreed to incorporate in the bill the proposal made by the Department of Finance (DOF), together with the Department of Trade and Industry (DTI), to remove the excise tax exemption of pick-up trucks introduced under TRAIN.

During the same hearing, the panel also approved the proposed “Philippine Mining Fiscal Regime Act.”

"The new fiscal regime for mining is the grandest and most desirable of these reforms, generating some PHP37.5 billion in new revenues on its first year of implementation," he said.

He further noted that the measure imposing a 12-percent value-added tax (VAT) on foreign digital service providers (DSPs), which was approved at the committee level last week, is expected to yield some PHP11.7 billion in new revenues on the first year.

"This will assure him of the fiscal space needed to meet the assumptions of the Medium Term Fiscal Framework, which is an annual tax effort growth of 0.3 percentage points. These three measures, in fact, exceed that target slightly," he said. "I assure President Marcos that his government will have the fiscal space it needs from Congress." (PNA)