DOF chief cites key reforms paving way for new tax law

Finance Secretary Carlos Dominguez III has cited the key reforms implemen-ted by past administrations, which he said paved the way for the current go-vernment to pass a new tax reform law.

Dominguez, during a speech before the local business community, said the Tax Reform for Acceleration and Inclusion (TRAIN) Act is a “logical continuation of decades of reforms arduously passed by previous administrations.”

He said the passage of various economic reforms under the leadership of former presidents Gloria MacapagalArroyo and Benigno Aquino III has enabled the Duterte administration to carry out a tax reform initiative needed to make the country’s tax system fairer, simpler and more efficient.

“We are not navigating blindly in pursuing these reforms. Instead, we are marching forward guided by the paths already plotted out before us. We have not forgotten their achievements. We will build on these past gains and do better,” Dominguez said during the 69th inaugural meeting of the Management Association of the Philippines (MAP).

Dominguez cited the passage of the value-added tax (VAT) reform law in 2005 under Arroyo, which he said saved the Philippines from a fiscal crisis and allowed the economy to grow robustly in the last 14 years.

The finance chief likewise acknowledged the implementation of the Tax Incentive Management and Transparency Act (TIMTA) under the Aquino administration, which has provided the current

government necessary data in crafting the second tax reform bill it submitted to the Congress.

To recall, the DOF last Jan. 15 submitted the second package of the Comprehensive Tax Reform Program (CTRP) to the House of Representatives. This focuses on the income tax and incentives of corporations.

According to Dominguez, the TIMTA has enabled the current government determine to determine that about P301 billion in incentives were given to businesses in 2015, alone, in the form of tax holidays, tax and customs duty exemptions, and other perks.

“We are logically expanding what the previous administration has started with the TIMTA Law,” Dominguez said.

“It is high time we use this important reform to revisit

From B1 what we give away in tax incentives to see if they are really generating jobs, stimulating the economy in the countryside, and promoting research and development,” he added.

Meanwhile, Dominguez also took note of the support of organizations, such as MAP, for the successful enactment of the TRAIN.

Republic Act 10963 or the TRAIN Law slashes personal income tax rates while raising tax rates for fuel, automobile, sugarsweetened beverages, coal, and tobacco, among others.

Dominguez said the additional P89.9 billion revenue to be generated from the law will provide the government a boost to implement programs to modernize the nation’s logistics backbone, upgrade public services and improve living standards.