DoF to submit all CTRP packages
All remaining packages under the government’s Comprehensive Tax Reform Program (CTRP) will be submitted to Congress this month, a senior Finance department official said on Thursday.
Package 2 Plus will be added to packages three and four that Finance Secretary Carlos Dominguez 3rd said would be delivered to the House of Representatives before July 31, Finance Undersecretary Karl Kendrick Chua told reporters.
“By the end of the month, all the remaining packages are already submitted to Congress. We have proposed and prepared everything so it’s up to them to hear it and pass it as they see fit,” Chua said.
Package 3 will cover property taxes and make sure that property appraisals are done regularly and in an internationally accepted way, while Package 4 will simplify financial taxes by reducing the levy on interest income from peso deposits and harmonize all capital income tax rates at 10 percent, the Finance department has said.
Package 2 Plus, meanwhile, involves the rationalization of mining taxes and also includes value-added taxes on casino gaming income.
Congress has so far only passed part of Package 1, which became the Tax Reform for Acceleration and Inclusion (Train) Act that took effect at the start of 2018. The law raised taxes on a number of goods and services in exchange for lower personal income tax rates.
Still pending at the House are Package 1B, which aims to complement the Train law by implementing a tax amnesty and changes to the motor vehicles user’s charge and the Bank Secrecy law, and Package 2 that proposes the lowering of the corporate income tax (CIT) to 25 percent from 30 percent while modifying tax incentives for investors.
The Finance department had wanted Congress to approve Package 1B before it went into recess last month as the additional revenues it would bring had been factored in this year’s fiscal program. Package 2, meanwhile, was targeted for approval before the year ends but officials have said the department was now looking at the first half of 2019.
Dominguez on Wednesday sought the support of economists for Package 2, which he said would improve a tax system that had become “fundamentally unfair” for small and medium enterprises.
“Our fiscal incentives regime gives so much to a select few and asks so little from them, like promising forever to neglectful partners while the country fails to provide enough to secure the future of its own children,” Dominguez was quoted as telling economists from various multilateral and local institutions.
The Finance chief also asked for guidance in fine-tuning Package 2.
“It is in this historic moment that a statement of support from you, our country’s eminent economists, for the second tax reform package would be most welcome as those who benefit from the status quo are quite active and vocal in their opposition (of this reform),” the Finance department quoted Dominguez as saying.
In May, former Finance secretaries and undersecretaries from the past four administration issued a joint statement that called on Congress to take “urgent” and “timely” action on Package 2.
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