PALACE and Finance officials will separately meet with Senate leaders next week to discuss President Rodrigo R. Duterte’s legislative agenda, Finance Secretary Carlos G. Dominguez III said on Friday.
This comes after Senate President Vicente C. Sotto III said the chamber won’t be able to pass a bill that seeks to lower corporate income tax and rationalize tax incentives by March.
Senate leaders will meet with Palace officials on Monday, to be followed by a meeting with Finance officials two days later, Mr. Dominguez told reporters in a Viber message.
He said he remained hopeful that the Senate would approve the measure before Congress takes a seven-week Holy Week break.
Mr. Sotto earlier cited the intricacies in the proposed Corporate Income Tax and Incentives Rationalization Act (CITIRA) and Passive Income and Financial Intermediary Taxation Act (PIFITA).
Mr. Dominguez last week said the bill seeking to lower corporate income tax would rationalize the government’s “tangled” tax incentive scheme, which has forced it to forego hundreds of billions of pesos in revenue.
Also referred to as the second package of the Comprehensive Tax Reform Program (CTRP), it is one of Mr. Duterte’s priority measures.
Aside from the P441 billion pesos the government “gave away as tax discounts,” some companies that avail themselves of fiscal perks cheat the state by abusing transfer pricing rules or by shifting profits and costs to cut tax liabilities. The latter costs the government about P504 billion in a year, he said.
Senators are still discussing the bill. The House of Representatives approved a counterpart measure in September last year.
The Finance department wants the remaining tax measures under the tax reform program to be approved before the campaign season for the 2022 presidential and general elections kicks in.
All of the remaining bills under the tax reform program are still at the committee level, Mr. Sotto said in a mobile-phone message, adding that he could not guarantee their approval on time.
The passive income bill, which will simplify the tax structure by halving the 80 combinations of tax base and rates on passive income and financial transactions, is pending at the Senate committee level.
“The complicated tax structure makes tax administration and compliance difficult and costly for both government and the private sector,” Mr. Dominguez said in his speech last week.
Other pending tax reform bills include one that seeks to simplify real property valuation and assessment and another that will raise the government’s share in mining revenue.
Mr. Dominguez said the remaining tax packages will “help produce a more business-friendly environment.”
“While we await the passage into law of these remaining tax reform packages, we continue to implement measures that will reinvigorate our capital markets, boost investor confidence and enhance financial inclusion,” he said. — Beatrice M. Laforga