CTRP successes cited
MANILA -- Finance officials reiterated their commitment to push for the approval of the proposed Comprehensive Tax Reform Program (CTRP) to ensure funding for the Duterte government’s “Build, Build, Build” program.
The first package, now called Tax Reform for Acceleration and Inclusion (TRAIN) Act, was signed into law in December 2017 and took effect the following year.
The law cut workers’ income tax rates and made their first PHP250,000 annual income tax free.
The Department of Finance (DOF) said workers were able to get a total of PHP111.7 billion from personal income tax last year as a result of the TRAIN law.
To address the cost of the said law on government revenues, the TRAIN increased the excise tax on fuel products and introduced excise tax on sugary drinks.
TRAIN revenues reached PHP68.4 billion in 2018, PHP5.1 billion higher than the full-year target of PHP63.3 billion.
Finance Secretary Carlos Dominguez III earlier hailed the approval of the TRAIN law, citing that this is a big win for the current administration in line with the target to spend at least a trillion pesos annually for its infrastructure program.
This 2019, revenues from the tax reform program in general is targeted to reach PHP181.4 billion.
Other programs under the CTRP include the reforms of the Sin Tax Law, the corporate income tax, property taxation, and capital income taxation.
Earlier, Dominguez said these measures will ensure the government’s fiscal sustainability.
Aside from the tax reform measures, the finance department has push for the institution of several measures that will ensure not only increased revenues but also help ensure effective tax collection.
One of these programs is the crackdown on illegal cigarette producers, who are using fake tax stamps, among others.
Dominguez expect the illicit cigarette trade to increase following Congress’ approval of a law imposing higher tax on tobacco products, thus, he has ordered greater monitoring of the situation.
Under the said measure, there will be a unitary excise tax of PHP45 per pack of tobacco product starting 2020 and a PHP5 billion increase annually until the excise tax reaches PHP60 per pack by 2023.l
The increased focused on this industry has enabled the government to end violations of cigarette manufacturer Mighty Corporation, which was collected of more than PHP30 billion in 2017 for nonpayment of excise taxes and use of fake tax stamps.
Authorities said the sin tax reforms are not primarily targeted to increase revenues but is actually a health measure since the government spends big amount on public hospitals and medical facilities for the treatment of poor Filipinos who acquired smoking-related diseases.
Dominguez said the proceeds of the Sin Tax Reform law will be utilized to fund the government’s Universal Health Care (UHC) program, which needs about PHP1.44 trillion from 2020-24.
Meanwhile, Dominguez has vowed strict monitoring of rice prices to ensure that profiteering will not be a norm after the Rice Tarrification Law took effect last March.
Economic managers pushed for the passage of this particular law to ensure adequate rice supply and prevent a spike in prices and pushed inflation high just like what happened last year.
In 2018, inflation peaked at 6.7 percent in September and October due to supply-side pressures on account of the lack of supply of rice and several other agricultural and meat products. “The rice liberalization law is one of the most important legislative achievements of the 17th Congress and the Duterte administration,” he said, noting that this law resulted to the drop of per kilo price of rice of about PHP5-10.
He said since rice is a staple food for Filipinos there is a need to ensure its supply and that prices are low since “poor families spend around 20 percent of their family budgets on rice.
He said “millions of Filipinos move above the poverty line when rice is cheaper.”
“We see this in the reduction in self-rated poverty during the first quarter of 2019, now at its historic low as reported by SWS (Social Weather Stations).
Results of the SWS survey done last March showed that fewer Filipinos consider themselves poor at 9.5 million from 11.6 million in December last year.
Dominguez said they are closely coordinating with the Department of Trade and Industry (DTI), Department of Agriculture (DA) and the National Economic and Development Authority (NEDA) to monitor “import and retail prices to check whether traders are earning fair, and not excessive, profits.”
“We expect that the effects of enhanced competition among importers will be felt even more through additional retail price reductions,” he said.
We should let the rice liberalization law, which is three decades late, do its work and give the economy time to adjust for the further easing of rice prices for more than 100 million Filipinos. We should also implement the rice fund efficiently and effectively for our two to three million rice farmers, he added. (PNA)