‘All tax reform packages seen in place by 2020’
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Tue, 25 Jun 2019 16:27:41 +0000
The Department of Finance (DoF) targets to implement all of the government’s tax reform packages by next year, according to Secretary Carlos Dominguez 3rd.
“By 2020, the DoF aims to have all tax reform packages in place, including the reduction of the corporate income tax from 30 percent to 20 percent and…in the number of capital income tax rates from 80 to 42,” Dominguez was quoted as saying during an interview with representatives of the Oxford Business Group.
The still-to-be-approved packages of the government’s Comprehensive Tax Reform Program are Package 1B, which seeks to reform the Motor
Vehicle Users’ Charge; Package 2, which calls for the lowering of corporate income tax from 30 percent to 20 percent and the rationalization of fiscal incentives; Package 2 Plus, which proposes additional excise taxes on tobacco and alcohol products, as well as increase the government’s share from mining; Package 3, which covers reforms in property valuation; and Package 4, which proposes the rationalization of capital income tax.
The first package, Republic Act 10963, or the Tax Reform for Acceleration and Inclusion (Train) Act — which reduced personal income taxes in exchange of increased excise taxes on automobiles, fuel, coal and sugar-sweetened beverages — was implemented at the start of 2018.
According to Dominguez, Train attained 108.1 percent of its revenue target in 2018, enabling the government to increase public infrastructure investment.
Revenues from Train reached P68.4 billion last year, higher than its P63.3-billion full-year goal, accoridng to the Finance department.
“With the tax reform program creating a robust flow of revenue, we now have the means to invest in upgrading our logistics backbone,” the Finance chief said.
Large-scale infrastructure development is a top priority of the Duterte administration under its flagship Build Build Build program, which has 75 priority projects.
Although concern has been raised in some quarters about the overreliance on official development assistance (ODA), Dominguez outlined how the country has maintained a balanced source of financing.
Finance data showed that China and Japan have each committed $9 billion in ODA, while South Korea has pledged $1 billion.
“These commitments complement the financial support received from multilaterals, such as the World Bank and the Asian Development Bank,” Dominguez said.
The Finance department, he added, has taken great care to ensure that the economic returns on major projects far outweigh the costs of financing, and that they have a diverse pool of project funding.
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