Government to raise P566B from new tax measures — DOF

MANILA — The Duterte administration is looking at raising P566.4 billion from the proposed tax reforms to finance much-needed infrastructure, nearly three times the expected P198.3 billion foregone taxes arising from revenue eroding measures.

Finance Secretary Carlos Dominguez presented the proposed tax reform measures of the national government to the Senate Ways and Means Committee.

The proposed measures cover five packages that are seen to provide P368.1 billion in revenues over the next few years.

“In the end, this is not simply about revenues and expenditures… This is about building our nation,” Dominguez said.

The first package involves the personal income and consumption tax wherein the Department of Finance (DOF) expects to forego about P159 billion by reducing the maximum tax rate to 25 percent from the current 32 percent over time and at the same time adjust brackets to correct “income creeping.”

The Finance department is also looking at shifting to a modified gross system to simplify the personal income tax system.

To compensate, the Finance department expects to raise P359.7 billion from offsetting measures that include the expansion of the value added tax (VAT) base by limiting the exemptions for senior citizens and persons with disabilities to food, health, and education; adjustment of marginal threshold for low income consumers and businesses; higher excise tax on oil; levy on sugary products; and relaxation of the Bank Secrecy law for fraud cases, and the inclusion of tax evasion as a predicate crime to money laundering.