MANILA -- Finance Secretary Carlos Dominguez III remains hopeful that lawmakers would still approve pending tax reform packages, a priority program of the Duterte administration, citing their potential benefits to the country.
Dominguez said there are two four-week periods before and after the May 13 midterm elections that lawmakers can use to discuss the tax reform proposals.
“We have eight weeks. A lot of the packages are already in the late stage and are ready to go. Sure, we understand that there are problems in the budget but they can finish it in a day if they want,” he said.
For one, sessions in the House of Representatives will adjourn on February 9, and this will last until May 19, or about a week after the midterm elections on May 13.
The last session of the 17th Congress at the House of Representatives will be on May 20 until June 7.
Sessions in the Senate, in turn, will adjourn on February 8 and resume on May 20.
One tax reform measure currently being discussed in Congress is TRAIN's second package (TRAIN2), which is targeted to cut corporate income tax (CIT).
Dominguez said this particular package benefits 99 percent of corporations since CIT will be reduced from 30 percent to 25 percent.
“That is a big incentive for the people. If you think about it that way, you should be able to pass it in a flash,” he said.
Based on the Department of Finance’s (DOF) Package 2 proposal, CIT will be cut by 2 percent every other year starting 2021.
This package seeks to support the growth of micro, small, and medium enterprises (MSMEs), which comprise 99 percent of all businesses in the country and employ about two-thirds of the country’s workforce.
The DOF is also proposing the rationalization of tax incentives, noting that big, profitable companies continue to enjoy perks at the expense of revenues that government badly needs to fund its programs.
The finance chief lamented that approval of these tax measure depends on “who the legislators are going to listen to (whether) the vast majority of Filipino companies or a few foreign companies.”
“Who are they going to listen to? That is the issue now. If you are a legislator thinking right, of course, you will benefit the Filipinos,” he said.
Dominguez explained that for any tax incentives to be efficient, it has to be time-bound and transparent “so that everybody knows who’s getting what.”
He said the incentives should also be targeted and performance-based.
“If you say you will create a thousand jobs, you better create a thousand jobs or we will take it away from you. We do not want to squish anybody,” he said.
“This is a big benefit to the business community. This will benefit the small guy running the business,” he said.
Dominguez said finance officials are willing to discuss issues regarding capital income tax, among others, to achieve the goals of the tax reform program.
“To simplify, it is for everybody’s benefit,” he added. (PNA)
