MANILA—Measures to ensure that the Philippines’ strong domestic growth get further traction, and thus, prevent any impact of protectionist policies globally, will be hampered if lawmakers turn down the proposed tax reform proposal.
“Congressional action on the first phase of the DOF-proposed CTRP (Comprehensive Tax Reform Program) would help create a strong buffer that will insulate the country from the surge of protectionism now sweeping across the globe, and thereby keep the economy on its targeted annual expansion of seven percent or better,” Department of Finance (DOF) Secretary Carlos Dominguez III said Wednesday.
This, after the House of Representative’s Ways and Means Committee on Tuesday “approved in principle” the first package of the comprehensive tax reform program (CTRP), which calls for the cut in personal income tax and the hikes in the excise taxes on fuels and vehicles and reduction in the number of groups given value added tax (VAT) exemption.
Most members of the House’s Ways and Means Committee, led by Quirino Rep. Dakila Carlo Cua, want the approval of the tax reform proposal’s first package as a whole and not just portion of it but stressed the need for a technical working group (TWG) to hear all the proposals and consolidate it before any approval.
Dominguez said lawmakers’ thumbs up on the CTRP’s first package would help the Duterte government’s economic goals and enable the country to be an upper-middle economy through investment-driven and consumption-led growth and, thus, lower poverty rate to 14 percent from the current 21.6 by 2022.
He said the Cua-sponsored House Bill 4774, which mirrors DOF’s tax reform proposal, would aid in the Duterte administration’s bid to “make the country’s tax system more progressive, especially for low- and middle-income earners.”
He said the measure would also “generate sufficient revenues for unmatched higher spending on infrastructure; on education, health and other forms of human capital development; and on social protection for the poorest Filipinos to cushion the initial impact of the proposed adjustments in consumption taxes.”
He remains hopeful that lawmakers consider the importance of this measure “to set the economy on its irreversible path to high—and inclusive—growth under the Duterte presidency.”
“Package One of the CTRP, as contained in HB 4774, is the launching pad for the Duterte administration’s 10-point socioeconomic agenda that aims to transform the Philippines into an upper middle-income economy (like Thailand) by the time the President steps aside in 2022 and into a high-income one (like Malaysia ) in one generation or by 2040,” he added.