Businessmen willing to take hit from tax reform

MANILA, Philippines — Local businessmen are willing to take a hit from the implementation of the tax reform program, noting that the measure is an essential investment in the government’s economic agenda.

“Considering the government has big plans on infrastructure, education and agriculture, we realize that from the tax side of it, you have to look at it as an investment for the country. For us in the business sector, it’s an investment for the country. Without that, we cannot be competitive. So we do support that,” Philippine Chamber of Commerce and Industry (PCCI) president George Barcelon said.

“Even from the onset, we have supported in general the tax reform though we know that many of our members will be hit. Many of our members will be hit even by  just the taxes on cars, but they don’t mind. They said there will be winners and losers and we are prepared to do our share because we know the government needs the funds to be able to do what it wants to do, many of which are our suggestions also,” PCCI honorary chairman Sergio Ortiz-Luis Jr. said.

 The Department of Finance (DOF) is optimistic the first package of the Comprehensive Tax Reform  Program (CTRP), which aims to make the current tax system simpler, fairer and more efficient, will be implemented starting Jan. 1 next year.

 The first package under the CTRP, more popularly known as Tax Reform for Acceleration and Inclusion (TRAIN), seeks to slash personal income tax rates for compensation earners, while raising additional revenues for the government’s public investment program through the expansion of the value-added tax base and adjustments in the excise tax rates for fuel and automobiles, among other measures. 

“Of course most business people would like that taxes not be increased drastically too fast, but the government is doing calibrated efforts so that the impact on the business side will not be too much,” Barcelon said.

 He said the CTRP is an investment essential in the country’s pursuit for further economic development.

The PCCI officials, however, said the group is hopeful the sacrifices the private sector will be making would be put into good use by the government to benefit the Filipinos.

 “We’re not saying that the increase in taxes  has no impact to the business sector. It has. But we hope that with all these increases, we can see the benefits. We hope that with all these new tax collection, the government can share their report card on what they have accomplished. We hope that at the end of the day, they can show that this money has been put to good use,” Barcelon said.

 The House of Representatives has approved a modified version of the DOF proposal known as House Bill 5636 last May 31. It was transmitted to the Senate last July 11.

The Senate Committee on Ways and Means has approved its version of TRAIN—Senate Bill 1592—and elevated it for plenary deliberations last Sept. 20.

 The second package of the CTRP, which covers corporate income taxes and the modernization of fiscal incentives, meanwhile, is targeted to be submitted by the first quarter of next year, while packages three to five, which deals with property taxation, capital income taxation, environment and luxury taxation and health measures, is eyed for  submission starting the second quarter of 2018.