DOF unveils fiscal priority reforms under Marcos admin
THE Department of Finance (DOF) presented to the 19th Congress fiscal priority reforms as part of the Marcos administration’s Medium Term Fiscal Framework (MTFF) to steer the country back to a high growth trajectory.
“We will work for the passage of the remaining tax reform packages of the Duterte administration, along with other key policy measures that would help accelerate our [economic] recovery,” said Finance Secretary Benjamin Diokno in two consecutive organizational briefings before the respective Committees on Ways and Means of the Senate and the House of Representatives.
The DOF is pushing for reforms in real property valuation through the Real Property Valuation and Assessment Reform, a priority bill of President Ferdinand “Bongbong” Marcos Jr.
Related bills are pending in the Committees on Ways and Means of both chambers of Congress.
Diokno said the proposed legislation aims to broaden the tax base used for property and property-related taxes of the national and local governments and promote the development of a just, equitable and efficient real property valuation system.
“The measure mandates the adoption of internationally accepted real property valuation standards, rationalization of the process of valuation, and establishment of a single valuation base for taxation. The bill’s urgent enactment will assist the LGUs in optimizing revenue collections, which in turn, will promote genuine local autonomy,” said Diokno.
The DOF also aims to reduce the number of tax rates on passive income and financial intermediaries through the Passive Income and Financial Intermediary Taxation (PIFITA) Bill.
“PIFITA is aimed at making the taxation of passive income, financial intermediaries, and financial transactions simpler, fairer, and more efficient,” Diokno explained.
Mining
Related bills went through a first hearing on Wednesday, August 17, at the House Committee on Ways and Means.
The DOF also proposes to rationalize the Mining Fiscal Regime to increase government share by imposing a single fiscal regime applicable to all mining agreements. The proposed legislation also seeks to encourage full public disclosure on extractive industries.
The House of Representatives passed the said bill on third reading in the previous Congress. Albay Second District Representative and House Committee on Ways and Means Chairperson Jose Ma. Clemente “Joey” Salceda refiled the bill in the 19th Congress.
Diokno previously identified the mining industry as a growth sector that could potentially support the economy’s long-term expansion.
Meanwhile, the DOF is pursuing the imposition of Value Added Tax (VAT) on digital goods and services to level the playing field between traditional and digital businesses.
“This bill clarifies that goods or properties including digital or electronic in nature, and services including those rendered electronically, are subject to VAT,” said Diokno.
Plastic bags
As part of the government’s climate mitigation efforts, the DOF also plans to impose excise tax on single-use plastic (SUP) bags.
“The bill proposes to impose a P20 excise tax per kilogram of single-use plastics removed from the place of production or released from the customs house,” he said.
Substitute bills for the proposed VAT on digital goods and services and excise tax on SUP bags were approved by the House Committee on Ways and Means on Wednesday, August 17.
The DOF also supports the passage of the Military and Uniformed Personnel Pension Reform Bill; the Capital Market Development Bill; the Livestock Development and Competitiveness Bill; and the bills introducing amendments to the Land Bank and the Philippine Crop Insurance Corp. Charter.