‘Budget for Real Change’ explained

FINANCE Secretary Carlos Dominguez III on Monday said the “Budget for Real Change” that Malacañang has submitted for congressional approval will flesh out the vision of President Rodrigo Duterte for the country, which, by 2022, will be free of insurgencies and organized crime, and boasts a poverty rate of just 17% resulting from investments that create quality jobs and disperse wealth.

In his presentation to the Congress as a member of the Development Budget Coordination Committee (DBCC), Dominguez told the House committee on appropriations that to realize President Duterte’s vision of inclusive growth, as spelled out in the 10-point socioeconomic agenda, the government must implement a comprehensive tax reform package that includes lowering personal and corporate income taxes and simplifying tax processes, while accelerating spending on infrastructure and investments in human capital.

“Obviously, we need to put together a truly transformative tax reform program,”said Dominguez during the first appropriations committee hearing on the proposed 2017 General Appropriations Act (GAA) of P3.35 trillion.

He added: “Just to make the challenge more interesting, the tax reform package must be designed not just to raise revenues but support inclusive growth. It must be a revenue package that coheres with the goals of maintaining the sustainability of our debt program, and more importantly, attracting investments, creating meaningful jobs and eradicating poverty.”

The revenue erosion from the lowering of income tax rates, Dominguez said, would be offset by reform initiatives that include broadening the tax base, reviewing fiscal incentives that have not been indexed to inflation, adjusting the fuel excise tax rates, imposing taxes on unhealthy food items and eliminating some VAT exemptions.