Tax reform package to be submitted to Congress by September –DOF

Following President Rodrigo Duterte's promise to lower personal and corporate income tax rates, the Department of Finance (DOF) said a comprehensive tax reform package is scheduled to be submitted to Congress within the year to index taxes to inflation.

“(A) tax reform package will be submitted to Congress by around September of this year,” the DOF said in an emailed statement in response to Duterte's first State of the Nation Address (SONA).

Duterte, in his SONA, said he supports the lowering of lower income tax rates, a proposal that was flatly rejected by his predecessor, Benigno Aquino III. 

“On taxation, my administration will pursue tax reforms towards a simpler, and more equitable, and more efficient tax system that can foster investment and job creation. We will lower personal and corporate income tax rates,” he said.

The DOF noted, however, that along with the decrease in tax rates will come the widening of sin taxes to include more items such as junk food.

The latest data available from the Bureau of Internal Revenue (BIR) shows that the government collected P8.89 billion in April, up 1.09 percent from P8.79 billion the same period in 2015, bringing the year-to-date collection to P2.13 billion. The revenues were generated from taxes from tobacco and alcohol products. 

Aside from lower tax rates, Duterte also said in his SONA that “there must be sufficient income for all Filipinos to meet the basic food and non-food needs for their families.”

For his part, Finance Secretary Carlos Dominguez said that the President’s pronouncements will fast-track the 10-point socioeconomic agenda over the next six years.

“These sweeping initiatives are for us in Government to carry out and for Filipinos and private business to give their full backing in order to guarantee a sustained high – and inclusive – growth for all,” he said. —Jon Viktor Cabuenas/KBK, GMA News