Duterte supports higher taxes on alcohol, cars, non-essential goods
Presumptive president-elect Davao City Mayor Rodrigo Duterte is open to proposal of imposing higher levies on alcoholic products, luxury cars and other non-essential goods, the country’s top corporate tax experts claimed.
According to the Tax Management Association of the Philippines (TMAP), Duterte is amenable to increasing excise tax on alcohol products, luxury or high-end automobiles, and other nonessential goods to shore up government revenues.
Duterte’s position on several tax matters were gathered by TMAP 2016 Elections Tax Policy Survey among five presidential aspirants.
Benedict R. Tugonon, TMAP president, however, admitted that Duterte was not asked if he will support any proposals that will call for higher excise tax rate on cigarettes, or the inclusion of sugary drinks in so-called “sin” products.
Tugonon, meanwhile, said that Duterte has no plan to increase the current 12-percent value-added tax (VAT), or expand its coverage to include other essential goods and services, like rice and text messaging.
Duterte also does not plan to raise the excise tax on petroleum products, the TMAP president said.
“If Congress and the Senate will take its cue from the future president, there would be no increase in the VAT rate from our current rate of 12 percent, no additional transactions to be covered by VAT, and no increase on the excise tax on petroleum products, during his term,” Tugonon said.
But Tugonon said Duterte supports the proposed comprehensive tax reform that aims to overhaul the current system of national taxation in the Philippines—the National Internal Revenue Code (Republic Act No. 8424), commonly known as Tax Reform Act of 1997.
“The general direction is he’s supportive of an effort to have a comprehensive tax reform program, meaning to say, we will overhaul again the tax code, we will come up with a new tax code if possible,” Tugonon said.
But before pursuing the complicated comprehensive tax reform plan, Tugonon said that Duterte plans to immediate revisit the 29-year-old personal income tax brackets of the Bureau of Internal Revenue (BIR) within the 180days of his administration.
“TMAP is optimistic that there would be changes coming at the tax front as Mayor Duterte confirmed that he would institute moves for a genuine comprehensive tax reform, which would be a priority of his administration,” Tugonon said.
Duterte also confirmed that he would push for the elimination of corruption at BIR and the Bureau of Customs, Tugonon said, highlighting the need to adopt institutional and drastic reforms to improve performance at the government’s two main tax agencies.
Duterte also supports the lifting of the bank secrecy law consistent with international standards to enable revenue authorities to combat tax evasion, Tugonon said.
“We call on the members of the Senate and the House of Representatives to consider the views of our incoming President,” Tugonon said.