Dominguez: 'Watered down' tax law to shrink infra plans
The number of projects to be implemented by the Duterte administration may go down if the Congress pass a "watered down" comprehensive tax reform measure,Finance Secretary Carlos Dominguez III said Tuesday.
"If we do not do it, or we get watered down below P137 billion, it’s going to be very bad for the infra program," Dominguez told reporters during a forum in Manila.
"It will cut it down between 30 percent and 50 percent, because we will simply be unable to afford it," he emphasized.
The Duterte administration is planning to implement 75 infrastructure projects in its pipeline and spend P8 to P9 trillion over the next five years.
The original version of the tax reform proposals submitted by the Department of Finance would yield the government P174.2 billion in net gains.
However, the adjustments made in the lower house-passed version the bill would yield P133.8 billion of contributions to government revenue.
During his second State of the Nation Address, President Rodrigo Duterte called on the Senate to pass in full and immediately the administration's tax reform proposal.
"We have to show the senators, eventually the bicam, that all of these measures are very necessary and reasonable and very affordable," Dominguez said.
The first package of the tax reform bill seeks to reduce the personal income tax rates, while adjusting the excise tax on petroleum products and automobiles and expanding the value-added tax base as well as imposing tax on sugarsweetened beverages.
"This measure is an insurance package for us. We will have revenues to meet whatever headwinds we see in the future," Dominguez said.
"You are already seeing interest rates rising. With US getting back into the growth pattern ... interest rates won’t remain low. We need to get a buffer," the Finance chief noted.
For his part, Budget Secretary Benjamin Diokno is optimistic that lawmakers will pass the tax reform bill.
"Let's not scare ourselves. This bill will pass before the end of the year. I assure you that," Diokno said.
(GMA News Online)