Tax reform to ensure safer communities: DOF

FINANCE Secretary Carlos Dominguez III yesterday said the Duterte administration is seizing an "opportune convergence" of growth-friendly factors to reconfigure a tax system that is “crying out for reform” as a way to make Philippine communities safer and our society fairer for future generations.

Dominguez said that now is the best time to cut personal and corporate income taxes while still raising enough revenues to fund President Duterte’s vision of inclusive growth, against the backdrop of a surging economy, strong investor confidence, declining debt, a stable peso, record gross international reserves, a balance-of-payments surplus, and unprecedented public support for a sitting Chief Executive.

The President also has the political will and capital to drive this comprehensive tax reform plan at such a fast pace that was "unthinkable" in the past administration, he said.

“We will seize the opportune convergence of factors at this time: a dynamic growth rate, a robust growth potential, a stable currency, a stable fiscal profile and determined national leadership,” Dominguez said.

He added: “We will not waste this opportune convergence. We will make our society fairer for the sake of the next generations. We will make our communities stronger and protect our citizens. We will make our economic growth more sustainable and inclusive.”

President Duterte has put in place a 10-point socioeconomic agenda on inclusive growth to fulfill his electoral mandate of ensuring peace and public safety and spreading the benefits of economic growth to all sectors across all regions.

Dominguez said tax reform, which was also one of Mr. Duterte’s campaign pledges, is necessary to realize the administration’s vision of inclusive growth – provide relief to wage earners, broaden the revenue base, raise

spending on infrastructure and human capital, attract more investors and sustain the upward trajectory of the economy – without “courting a credit rating downgrade.”

“Bringing down individual income tax rates will boost the spending power of wage earners. Bringing down corporate tax rates will encourage investment inflows to our economy. The prevailing tax rates have been a disincentive to investments coming into our economy,” he said.