DOF pushes tax reform passage within 15 to 18 months

MANILA, Philippines — The Department of Finance (DOF) is pushing for Congress to approve the government’s tax reform program within the next 15 to 18 months, according to Finance Secretary Carlos Dominguez.

Dominguez said the DOF is targeting to have the government’s Comprehensive Tax Reform Program (CTRP), particularly the proposed increase in excise taxes on alcohol and electronic cigarette products, be passed by Congress before 2021 or before election season starts again. 

“That is our target because realistically speaking, once you hit 2021, you just look at what happened in 2015, everybody starts focusing on something else. I don’t think that it will be that much, but this is the reality we have to face, so we have to finish this thing by 15 to 18 months,” Dominguez said on the sidelines of the 115th Anniversary celebration of the Bureau of Internal Revenue (BIR).

According to the finance chief, this 15 to 18-month time frame would be the “most productive time” to push for the tax reform program.

Earlier, the DOF listed the passage of the CTRP as one of the five priority economic programs of the government in the second half of the Duterte administration.

Among the tax reform packages yet to be passed by Congress include Package 2, which aims to lower the corporate income tax and modernize the fiscal incentives system; Package 3, which seeks reforms in the property valuation system; and Package 4, which rationalizes capital income taxation.

The DOF is also looking forward to the approval of the remaining provisions under Package 1B-the motor vehicle user charge, lifting of bank secrecy and automatic exchange of information – and Package 2 Plus – the increase in alcohol and e-cigarette excise tax.

Dominguez expressed “very high” confidence that the 18th Congress would support the remaining tax measures.

The DOF earlier said it reorganized its personnel, creating a team In 2018, the government started the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Law, which cut personal income tax rates, while increasing excise taxes on fuel, automobile, coal, and sugar-sweetened beverages, and expanding the tax base by removing value-added tax exemptions.

Data from the DOF showed that the law generated P68.4 billion in net revenue last year, 8.1 percent higher than the full-year target of P63.3 billion.

This provided additional public resources to implement the government’s priority programs, including infrastructure and human capital development programs, the DOF said.