Neda: Tax reforms high on Ledac agenda
Economic managers will push for the swift passage of comprehensive tax reforms as well as a national ID system at the scheduled meeting between President Duterte and leaders of Congress today, the country’s chief economist said.
Socioeconomic Planning Secretary Ernesto Pernia said the Duterte administration’s priority legislative agenda would be discussed at the Legislative Executive Development Advisory Council (Ledac) meeting scheduled for 2 p.m.
Ledac, formed in 1992 through Republic Act No. 7640, “serves as a consultative and advisory body to the President on certain programs and policies essential to the realization of the goals of the national economy.
Mr. Duterte’s economic managers early on in the administration pointed out the need to again convene Ledac to inform the legislative of the executive’s proposed priority legislation in line with its 10-point socioeconomic agenda.
The 10-point agenda was ultimately aimed at slashing the poverty incidence to 14 percent by 2022 from 21.6 percent last year.
Pernia said the Cabinet’s economic cluster had identified tax reform, the national ID system, the creation of a national transport policy, as well as the establishment of a national water board among the reforms with which they needed the help of Congress.
House Bill No. 4774, filed by House ways and means committee chair and Quirino Rep. Dakila Carlo E. Cua this month, contained the Department of Finance’s (DOF) proposal to lower personal income taxes, broaden the value-added tax base by cutting down on exemptions, increase excise taxes on petroleum and automobiles, as well as reduce the estate and donors’ tax rates.
HB 4774 will no longer move to remove the value-added tax exemption being enjoyed by senior citizens as well as persons with disabilities.
Instead of a one-time P6 hike in the excise tax on fuel, HB 4774 proposed to implement it in three tranches of P3, P2 and P1 during the first three years.
HB 4774 will also push for tax on lottery, while lowering the estate and donors’ taxes to 6 percent.
Under the first package, the following tax administration measures were to be pursued: mandatory use of fuel marking; mandatory issuance of e-receipts; mandatory interconnection of large and medium firms point of sale machines and accounting system with the Bureau of Internal Revenue; mandatory use of GPS locks when transporting cargo from ports to economic zones and free ports; and relaxation of bank secrecy for fraud cases.
The bill retained the key provisions of the original first package as proposed by the DOF, including adjusting personal income tax brackets to correct “income bracket creeping”; reducing the maximum personal income tax rate to 25 percent over time, save for the “ultra-rich” who would be slapped a higher 35 percent; and shifting to a simpler modified gross system.
Based on the DOF’s computations, the first package will result in a net revenue gain of P162.5 billion in its first year.
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