The Finance department will keep pressing the Senate to approve the entirety of tax reforms deemed crucial for the government’s infrastructure push.
“We respect the Senate — the legislature — that is obviously what they perceive their function to be. Of course we will continue trying to convince them that what is required is a bit more than that,” Finance Secretary Carlos Dominguez 3rd told reporters.
Dominguez was commenting on statements made by Senator Juan Edgardo Angara, ways and means committee chairman, that the chamber was unlikely to approve all of the Finance department’s tax proposals.
Package one, which aims to lower personal income taxes, expand the coverage of the value-added tax, raise excise taxes and improve tax administration, has been approved with changes by the House of Representatives.
The Senate is currently considering its own measure, which contains the original Finance department proposals.
Angara last week said that some changes would involve lowering the proposed sugar sweetened beverage tax to P5 from P10 per liter, staggering the implementation of higher fuel taxes and retaining value-added tax exemptions for housing and renewable energy.
The potential revenue from the Senate version, he claimed, would be about P130 billion or about the same as the P133.8 billion estimated by the Finance department.
“Again, I said this government works as a team and the administration is certainly aware that there are other opinions and we try to engage them in discussions toward that goal,” Dominguez said.
The push to have package one approve has prompted the Finance department to delay the formal filing on new tax reform measures to next year instead of the fourth quarter of 2017.
“I think we should finish the package one first before we discuss the package two; probably we will move it three months down, so by January,” Dominguez earlier told reporters.
The second set will call for the lowering of the corporate income tax to 25 percent from 30 percent and rationalizing fiscal incentives for businesses. In terms of revenue potential, the Finance department has said that package two would be neutral.