Fresh tax hikes eyed under ‘Package 2 Plus’

Asupplement to Package 2 of the government’s Comprehensive Tax Reform Program (CTRP) will be submitted to Congress later this month, Finance Secretary Carlos Doinguez 3rd said on Tuesday.

“By the end of the month, we shall also be submitting Package 2 Plus, which includes taxes on tobacco, alcohol, mining, coal, and casinos,” Dominguez announced in a speech during a Management Association of the Philippines meeting.

Package 2, which seeks to lower the corporate income tax rate to 25 percent from 30 percent and rationalize incentives granted by the government, was submitted to Congress last week. The measure has been described as “revenue- neutral” by the Finance department.

While tobacco excise taxes have already been increased under Package 1 or the just-implemented Tax Reform for Acceleration and Inclusion (Train) law, Dominguez said further adjustments could be needed.

“We will help them (Congress) with it. You see, the senators want to increase the tax on cigarettes. One wants to bring it up to 60 percent, the other one wants to bring it up to 90 percent … there are other non-tax measures that we might be able to put in but again we will discuss it with them,” he said.

Under the Train law, cigarettes packed by hand ad by machine will be levied P32.50 per pack this year, P35 per pack by 2019, P37.50 by 2021, and rates will increased by 4 percent every year thereafter.

Dominguez also said there was a need to rationalize taxes on mining, which the Finance department has said was needed after President Rodrigo Duterte reminded all extractive corporations and contractors to pay the right amount of taxes.

“There is still the alcohol tax that has not been reviewed. And according to the original ‘sin’ tax law that should have been reviewed by the Congress,” he added.

For gaming, Dominguez said that Package 2 Plus would involve valueadded taxes on casino gaming income.

He did not elaborate on the supplemental coal tax plan. The Train