STA. ROSA, NUEVA ECIJA - Senator Panfilo Lacson and Senate President Vicente Sotto III on Sunday criticized the Department of Finance's (DOF's) proposed new tax package that would help the next president manage the trillions of pesos in government debt after the Duterte administration.
Lacson and Sotto, who are running for president and vice president in Eleksyon 2022, respectively, believed the tax hike was unnecessary given the contradicting policies as well as the lack of firmness in collecting revenue at the Bureau of Internal Revenues and Bureau of Customs.
“‘Yun ang ‘di ko maintindihan. Nagpsa tayo ng CREATE lowering the corporate income tax from 30 to 25 sa big corporations, [sa mga may] 100 million to 500 million taxable income [at] 30 to 20 sa below 5 million ang taxable tapos ngayon mag-i-increase na naman tayo ng tax? Ano ba talaga, kuya?” Lacson said in a press conference.
(I don’t understand them. We passed CREATE which lowers the corporate income taxes. Now, we are going to increase taxes. What do you really want to do?)
Lacson was referring to the Corporate Recovery and Tax Incentives for Enterprises (CREATE) measure which will reduce corporate income tax from 30% to 25% for corporations, and 20% for micro, small and medium enterprises.
The measure is expected to help the countryside as it would grant provinces the longest and biggest tax incentives of up to 17 years for new locators, and a bonus three-year-long income tax holiday for those relocating from the National Capital Region.
For his part, Sotto said there was no need for new or higher taxes as long as there were strict revenue collection mechanisms.
“Kolektahin mong mabuti ang BIR. Kulektahin mo ang Customs, ‘di mo kailangan magtaas,” the Senate chief said.
(We don’t need to increase taxes if we will collect all the taxes from BIR and Customs properly.)
In a recent interview, Finance Secretary Carlos Dominguez III said they are preparing a package for the incoming administration.
Dominguez added that they are willing to discuss ideas on how to handle the country’s “increasing debts” with all the presidential candidates.
As of the end of 2021, the Philippine government has P11.73 trillion worth of debt, bringing the debt-to-gross domestic product (GDP) ratio, or the amount of debt relative to the size of the economy, to 60.5%, slightly exceeding the internationally accepted sustainable threshold of 60%.
Furthermore, Sotto said the Regional Comprehensive Economic Partnership (RCEP) is unlikely to be ratified in the 18th Congress if the members of the Senate would further scrutinize the trade deal.
“Kung bobotohan [after] elections, tingin ko baka hindi pumasa, 16 votes ang kailagan non, 2/3 [of the members of the Senate] eh,” Sotto said in the same press conference.
The Senate chief said he has yet to consult other members of the upper chamber.
“Depende kung talagang maganda, madali yan. Pero sa six days kung ‘di maganda at katakot-takot na explanasyon, tagilid,” he said.
(If it's a good measure, it will pass easily. But if after six days and it turns out to be a bad idea needing long-winded explanations, it will be iffy.)
The RCEP is a trade accord that involves the 10-member ASEAN states along with China, India, Japan, South Korea, Australia, and New Zealand.
It will facilitate free or liberalized and simplified trade among the participating nations in the Trans-Pacific region.
The agreement was signed by Trade Secretary Ramon Lopez, on behalf of the Philippines, in November 2020 at the conclusion of the 37th Association of Southeast Asian Nations (ASEAN) Summit and Related Summits.
The Department of Trade and Industry is hoping that the Senate will concur with the Palace’s ratification of the RCEP.
Treaties or international agreements entered into by the government require Senate concurrence.
Both houses of Congress only have six days to tackle all pending measures in their respective chambers after it adjourned sessions last February 4 to give way to the Eleksyon 2022 campaign.
They will resume sessions on May 23. — DVM, GMA News