The government is claiming it would gain as much as P174.2 billion from the comprehensive tax reform package submitted to Congress in September, once it is signed into law.
In an emailed statement, Finance Undersecretary Karl Kendrick Chua said the proposed tax reforms would result in revenue losses of P127.4 billion in 2018 – the first year of implementation – but this would be offset by gains totaling P301.6 billion from additional revenue.
He was referring to the first package of proposals – reducing the personal income tax (PIT) and expanding the value-added tax (VAT) base – submitted to Congress.
Aside from expanding the VAT base, the DOF wants to adjust the excise tax on fuel and automobiles supposedly for a net gain of P174.2 billion.
Under the planned tax reform, the government is looking at raising the excise tax on gasoline to P10.00 per liter from P4.35 per liter, and on diesel – which currently has no excise tax – to P6.00 per liter.
“We recognize that the tax reform will affect a number of vulnerable people. We are very much committed to protecting the poor, vulnerable, and low income sectors. The poorer the household is, the more social protection subsidies it will get especially during the first year of implementation of the Tax Reform Package One,” Chua said.
The DOF on Tuesday said the planned reform package has the potential to "free" six million Filipinos from poverty over the next six years.
It said separately that four out of five taxpayers are going to benefit from such proposals, as 4.7 million taxpayers will no longer have to pay the PIT starting 2018. — Jon Viktor Cabuebas/VDS, GMA News