Congress break stalls CITIRA bill passage – DOF

It would be challenging for Congress to pass the Corporate Income Tax and Incentives Rationalization Act (CITIRA) within the year following the one-week suspension of Senate sessions, according to the Department of Finance (DOF).

The Senate has suspended sessions until Dec. 9 to give way to the Southeast Asian Games and the bicameral conference committee hearings.

Finance Undersecretary Karl Kendrick Chua said this one-week suspension won’t have much effect on the passage of Package 2 Plus of the Comprehensive Tax Reform Program (CTRP), but may delay the legislative process for CITIRA.

“For Package 2 Plus, which is in advanced stages where interpolations are on its closing stage, I think there is a big chance that it will be passed and the bicam can happen (within the year) to reconcile with the House version,” Chua said.

“Package 2 will be more challenging because of the one-week time that will mean there’s no session,” he said.

Package 2 refers to the CITIRA bill, which seeks to lower the corporate income tax rate in the country while rationalizing fiscal incentives. Package 2 Plus, meanwhile, involves higher excise taxes on alcohol, electronic cigarettes and heated tobacco products.

The DOF earlier expressed hope that these packages would be passed before the end of the year.

In a speech before the 2019 Manila Rotary Institute, Finance Secretary Carlos Dominguez said there is a need to pass the remaining tranches of the CTRP to ensure sustained economic growth.

Aside from Package 2 and Package 2 Plus, he also mentioned Package 3, which seeks reforms in the property valuation system.

“This will help local governments collect the right taxes and clear the way for many right-of-way issues that languish in our courts, sometimes for decades, delaying for too long the efficiency and relief that good infrastructure brings to businesses and commuters,” Dominguez said.

He also cited Package 4 or the Passive Income and Financial Intermediary Taxation Act, which would rationalize capital income taxation.

“This will level the playing field and develop our capital markets to attract more investors to take part in our infrastructure program. Simplifying the tax system in the financial sector will also help lower insurance costs, encouraging more Filipinos to avail themselves of financial protection from loss of life, property and damages incurred from natural disasters,” he said.

In addition, the finance chief also sought support for a proposal to implement a general tax amnesty program, coupled with the lifting of the bank secrecy for tax fraud cases and the automatic exchange of information among regulatory agencies.

According to Dominguez, “there is no turning back” on the government’s 10-point socio-economic reform agenda, which is designed to sustain the country’s economic growth.