The Department of Finance (DOF) urged the House of Representatives to pass the first of four packages of the government’s Comprehensive Tax Reform Program (CTRP) before its adjournment on June 2.
Finance Undersecretary Karl Kendrick T. Chua appealed to representatives to hasten the passage of House Bill (HB) No. 5636 which was approved by the House ways and means committee on May 15.
“With strong support from President Duterte and the high officials of the land, with more than 100 coauthors, the support of more than 100 stakeholder groups and millions of workers waiting for the reform, this is the time to move decisively,” Chua said.
HB 5636, the substitute bill incorporating 55 proposed measures, including cuts in personal income taxes and expanded excise taxes, will be read in the House plenary on Monday.
The DOF said at least 102 representatives were expected to support HB 5636, which contained only “moderate modifications” of the DOF-sponsored HB 4774, Chua said.
Aside from cutting personal income taxes, HB 5636 will also raise funds for the infrastructure projects that the government will roll out over the next six years.
Once passed by the House, the measure will be transmitted to the Senate, Chua said.
Sen. Sonny Angara, who chairs the Senate ways and means committee, said the package should go faster once the House had passed its version.
“We’ve had four committee meetings and a number of technical working group meetings, too. Things should speed up once the House has a final version,” Angara told the Inquirer.
HB 5636 will adjust personal income tax brackets to correct “income bracket creeping;” reduce the maximum personal income tax rate to 25 percent except for the “ultra-rich” who would be slapped 35 percent; and shift to a simpler modified gross tax system.
It will also broaden the value-added tax (VAT) base by cutting down on exemptions, increase excise taxes on petroleum, automobiles and sugary drinks and reduce estate and donors’ tax rates.
The DOF computations as of May 18 showed the government will lose P140 billion in 2018 because of lower personal income, estate and donor tax rates.
But the expansion of the VAT base and higher automobile and petroleum excise taxes will result in a revenue gain of P187.7 billion next year.
The higher tax on sugary beverages will add P65.8 billion in revenues on top of the P43.8-billion gain from tax administration measures.
Among the proposed tax measures included in the first CTRP are the 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.