Marcos Jr. administration eyes passage of remaining Duterte-era tax reforms
MANILA, Philippines — The Marcos Jr. administration is eyeing the passage of remaining tax reform packages left behind by former President Rodrigo Duterte.
At a press conference in Malacañang on Wednesday, Finance Secretary Benjamin Diokno said the new administration would push for the passage of Packages 3 and 4 of the Duterte-era Comprehensive Tax Reform Program (CTRP).
"...It will simplify a lot the tax system. So we will push for that. And then we expect that to be approved before the end of the year. And it will be implemented next year," Diokno said.
"I think the estimate then is that it’s supposed to be revenue neutral. No additional revenues will be hauled from this," Diokno added.
Package 3 of that tax reform program looks to build an "equitable and efficient" real property valuation system. Likewise, this measure is aimed at widening the tax base utilized for property-related taxes of national and local governments.
Congress lawmakers already passed this in November 2019 but has languished at the Senate committee level as of the end of 2021.
The Passive Income and Financial Intermediary Taxation Act (PIFITA) or Package 4 of the CTRP, meanwhile, seeks to complement the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Act by making passive income and financial intermediary taxes “simpler, fairer, more efficient, and more regionally competitive.”
This last package under the CTRP will reduce the number of differing tax rates from 80 to 36 and harmonize the tax rates on interest, dividends and capital gains, and the business taxes imposed on financial intermediaries.
Part of this package will also see the end of documentary stamp taxes imposed on non-monetary transactions.
"Any effort to improve tax collection and broaden the tax base will be welcome. Tax reform is a key component in fiscal consolidation," Nicholas Antonio Mapa, senior economist at ING Bank in Manila, said.
"Administrations come and go but long-lasting structural reforms will ensure growth can be sustainable," Mapa added. "With a supermajority, the current administration can and should utilize the political capita to push for reforms.
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