By Camille A. Aguinaldo, Reporter
FINANCE Secretary Carlos G. Dominguez III on Friday reiterated his call to Congress to pass the remaining packages of the government’s tax reform program this year.
“Last year, we were able to complete and to submit to Congress the succeeding packages of the tax reform programs. We hope after the mist that this electoral season clears that our legislators will find the wisdom of completing the tax reform program,” he said in a televised speech during the Rotary’s District Conference (DISCON) in Mandaluyong City.
“We’re hoping Congress will act later this year on the subsequent tax reform packages,” he added.
The House of Representatives has approved on third and final reading the Tax Reform for Attracting Better and Higher-Quality Opportunities (TRABAHO) bill as well as the packages 2 plus, 3 and 4 of the government’s Comprehensive Tax Reform Program (CTRP). All the measures remain pending in the Senate committee on ways and means, which conducted public hearings on some of the measures last year and during the Jan. 14-Feb. 8 session.
The TRABAHO bill or House Bill No. 8083 covers the reduction of corporate income tax and the rationalization of fiscal incentives. Meanwhile, package 2 plus, contained in House Bills No. 8677, 8618 and 8400, proposes to increase excise taxes on tobacco and alcohol products as well as increase the government’s share in miners’ revenues.
Package 3 or House Bill No. 8453 seeks to centralize valuation and assessment of real properties, while package 4 or House Bill No. 8645 proposes to simplify the tax regime for financial investors.
Senate President Vicente C. Sotto III has expressed doubts on the chances of the pending tax measures in the Senate reaching third reading approval in the 17th Congress.
Mr. Dominguez in his speech noted that the existing tax reform law has been successful in accomplishing both the government’s revenue and economic goals. He added that the tax reform packages would bring the government “robust revenue flow, make the system more equitable… and eliminate corruption with the assured transparency and help improve the ease of doing business.”
The Finance Secretary also assured that the Philippines would not fall into the “so-called debt trap” amid issues surrounding the China-funded projects, noting that the government has been “very conservative” and careful in its borrowing program.
“In 2018, our total project debt exposure to China was only 6/10s of 1% of our total debt, comparative to a project total debt in Japan which is 9% of our total debt. By 2022 when most financing from the Build, Build, Build program should have been accessed, our project debt to China will constitute around 4 1/2% of the total debt, while project debt to Japan will be around twice as large at 9 1/2 % of the total debt,” he said.
“There is no danger of us being drowned in Chinese debt. While we appreciate people warning us about the so-called debt trap. We certainly know how to avoid it,” he added.
China has provided a concessional loan financing for the $62.09 million Chico River Pump Irrigation Project and $211.21 million the New Centennial Water-Source Kaliwa Dam. The Davao-Samal Bridge Project in Mindanao and the Panay-Guimaras-Negros Inter-island Bridge in Western Visayas are two projects in the pipeline for possible Chinese funding.
Mr. Dominguez also raised the issue of the delayed enactment of the P3.757 trillion national budget for 2019, saying that the government has lost the opportunity to spend around P4.37 billion or around P740 million for January and February this year.
He said the period could have been spent to rollout projects, to build new infrastructure, and to upgrade the country’s health facilities.
“This is a clear example of how politicking could harm our people. As we rank among the best performing economies in this dynamic part of the world, growth is not a final goal in our efforts. We seek a more dynamic economy to bring down poverty and create more opportunities for our people,” Mr. Dominguez said.