THE GOVERNMENT hopes to persuade lawmakers to approve next quarter provisions scratched out upon ratification of the first of up to five planned tax reform packages, the head of the Department of Finance (DoF) said.

“Package one has become package 1A and 1B, the second part of the package,” Finance Secretary Carlos G. Dominguez III told reporters on Friday at the DoF headquarters in Manila.

“The legislature has committed that they will pass the second part of the tax package — part B of tax package one — by the first quarter of next year.”

Mr. Dominguez was referring to the planned estate tax amnesty and easing of the bank secrecy law. He also included a planned increase in the Motor Vehicle Users Charge.

Senator Juan Edgardo “Sonny” M. Angara and Quirino Rep. Dakila Carlo E. Cua, chairmen of the ways and means committees of the Senate and of the House of Representatives, respectively, did not respond when asked to confirm Mr. Dominguez’s remarks.

While the ratified version of the first tax reform package contained some significant departures from earlier versions, Mr. Dominguez said it should still generate about two-thirds of the P130 billion in additional revenues initially targeted in the first year of implementation — starting Jan. 1, 2018 — as projected.

Mr. Dominguez said he was confident that President Rodrigo R. Duterte would sign the ratified measure into law despite differences between the final and earlier tax reform versions.

“We had extensive discussions on that with them (lawmakers). Well what is already passed by both houses is already passed. In the version that was ratified by both houses, the VAT (value-added tax) on domestic coal production is exempt,” said Mr. Dominguez, referring to the measure’s controversial last-minute provision.

Asked whether the DoF is comfortable with the reform’s current configuration, Mr. Dominguez replied: “Well you know this is legislation, and we understand that the administration does not always get 100% of what it wants.”

“This is something, though, that is a step forward,” he added.

“In other words, when they ratified it on Wednesday we have a brighter future than what we were looking at last Tuesday.”

The first tax package which Congress ratified last Dec. 13 consists of reduced personal income, estate and donors tax rates; removal of some VAT exemptions; increased tax rates for fuel, automobiles, tobacco, coal, minerals, documentary stamps, foreign currency deposit units, capital gains for stocks not in the stock exchange, and stock transactions; new taxes for sugar-sweetened drinks and cosmetic enhancements; as well as tax administration measures.

The provisions on tobacco, coal, mining and documentary stamp taxes were supposed to form part of the next tax reform packages which the DoF planned to submit to Congress next year.

The entire tax reform program is designed to shift the burden to those who can afford to pay more, while raising additional revenues that will help finance the government’s ambitious P8.44-trillion infrastructure development effort until 2022. — Elijah Joseph C. Tubayan

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