Econ ex­perts laud tax re­form plan

The Philippine Star - - BUSINESS - By CATHER­INE TALAVERA

The Foun­da­tion for Eco­nomic Free­dom (FEF) has ex­pressed sup­port for the tax re­form pro­gram be­ing pushed by the De­part­ment of Fi­nance, say­ing this will lead to bet­ter lives for Filipinos.

“The com­pre­hen­sive tax re­form pro­gram lays a solid foun­da­tion for the gov­ern­ment’s vi­sion of in­clu­sive growth, im­proved public ser­vices and im­proved pur­chas­ing power among con­sumers,” the group of eco­nomic ex­perts said.

“We be­lieve that this pro­gram will trans­late to a more com­fort­able life

for all Filipinos along with safe, healthy and peace­ful com­mu­ni­ties across the coun­try,” the ad­vo­cacy group added.

FEF said fis­cal sta­bil­ity, sus­tained fund­ing for gov­ern­ment pro­grams and in­vest­ment-friendly tax poli­cies can help the Duterte ad­min­is­tra­tion achieve its growth tar­get of at least seven per­cent an­nu­ally, re­duce poverty from 21.6 per­cent to around 13-15 per­cent and sig­nif­i­cantly re­duce un­em­ploy­ment over the next six years.

It added that the en­tire tax re­form pack­age can help raise the ad­di­tional P1 tril­lion needed an­nu­ally to fund in­vest­ments in in­fra­struc­ture, ed­u­ca­tion, health, so­cial pro­tec­tion, train­ing, and re­search and de­vel­op­ment.

FEF also lauded the de­sign and var­i­ous com­po­nents of the pro­posed tax re­form pro­gram, not­ing it ad­dresses the iden­ti­fied prob­lems in the cur­rent tax sys­tem.

Among these prob­lems are the nar­row tax base; com­plex col­lec­tion poli­cies with numer­ous leak­ages; cum­ber­some and costly ex­emp­tions with de­bat­able ben­e­fits; in­equitable tax­a­tion of salaried work­ers; un­com­pet­i­tive rates vis-a-vis the coun­try’s peers; and tax poli­cies that are prone to gam­ing, eva­sion and cor­rup­tion.

“We par­tic­u­larly sup­port the down­ward ad­just­ments in the per­sonal in­come tax on the grounds of fair­ness. We also strongly back the re­duc­tion in the cor­po­rate in­come taxes, which will pro­mote and at­tract more in­vest­ments and fa­cil­i­tate job cre­ation,” FEF said.

The gov­ern­ment ear­lier said the tax re­form pro­gram will help raise funds for its Build Build Build pro­gram.

The group said it sup­ports the key rev­enue-en­hanc­ing mea­sures and pro­pos­als for in­cre­men­tal rev­enues for public in­vest­ments of the tax re­form pro­gram.

Among these mea­sures are the in­crease in fuel taxes; the ra­tio­nal­iza­tion and re­duc­tion in fis­cal in­cen­tives; the se­lec­tive lift­ing of bank se­crecy laws with re­spect to fraud; and the ex­pan­sion in the VAT base (in­clud­ing lift­ing of ex­emp­tions on co­op­er­a­tives, low-cost hous­ing, re­new­able en­ergy, and for se­nior cit­i­zens ex­cept medicine).

“We fully sup­port the tax re­form orig­i­nally pro­posed by DOF, and ap­peal to sen­a­tors not to un­duly di­lute its pro­vi­sions as this would im­pair the coun­try’s in­fra­struc­ture spend­ing and fis­cal sus­tain­abil­ity,” FEF said.

More­over, FEF said this tar­geted rev­enue hike will tem­per the im­pact of an­tic­i­pated higher in­ter­est rates due to global mar­ket de­vel­op­ments.

“We be­lieve that the com­pre­hen­sive tax re­form pro­gram will al­low ev­ery Filipino an eq­ui­table op­por­tu­nity to con­trib­ute to a sus­tained and truly in­clu­sive eco­nomic growth,” the group added.

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