Tax Reform Bills Still Pending, Passage Could Aid DOF Address Ballooning National Debt

There is a growing need to pass the pending tax reform packages in the Senate to ensure fiscal sustainability as the pandemic rages on, said President Duterete’s chief economic manager on Monday.

Among the tax reform programs which have been approved by the House of Representatives but are still pending in Congress include: the passive income and financial intermediary taxation bill; real property valuation and assessment reform; higher motor vehicle user’s charge; a new mining tax regime; and general tax amnesty with the lifting of bank secrecy for tax fraud cases and automatic exchange of information.

“Tax reform is extremely difficult to get approved in the legislature. Yet, you all took the challenge and delivered resoundingly on this task to help accelerate poverty reduction and attain the President’s promise of genuine change. It is through your hard work and dedication that made our success in passing the tax reform packages possible,” said Secretary Carlos Dominguez III to Department of Finance (DOF) personnel.

The recent passage of the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) was also spearheaded by the DOF. CREATE cut down the income tax rates of firms while rationalizing the fiscal perks of investors.

The DOF, likewise, led the passage of the Tax Reform for Acceleration and Inclusion Act (TRAIN), which posted new or higher tax rates on consumption like sin taxes while rationalizing personal income tax.

Passage of the pending bills in the Senate will aid the DOF in curtailing the national government’s ballooning debt starting in 2022, according to Albay Rep. Joey Salceda.

In an effort to finance the continued fight against the difficulties brought by the global pandemic, the government had been escalating its borrowings.

Source: Inquirer