The Congress is a step closer to helping the administration fund its goal of sustaining high-growth momentum to cut poverty and transform the country into a high middle-income economy by 2022, the Department of Finance said on Wednesday.
The House of Representatives approved “in principle” Package One of the Comprehensive Tax Reform Package (CTRP), the department said in a statement.
Finance Secretary Carlos Dominguez 3rd said the approval in principle of tax reform as a package and not on a piecemeal basis during the House Ways and Means Committee hearing on Tuesday is a welcome development.
House Bill (HB) 4774 contains Package One of the CTRP, which aims to lower personal income tax rates while
providing revenue enhancing measures.
Approving the bill in principle means that the measure would be tackled as a package, rather than per individual proposal. This ensures that the CTRP would be discussed by the TWG in its entirety, according to the DoF.
The ways and means committee noted the CTRP is subject to a review of by a technical working group (TWG) that would craft a substitute bill consolidating the proposed reforms by the DoF with other tax-related proposals by lawmakers.
The TWG, which will include members of the ways and means committee and the DoF, will discuss pending concerns by stakeholders and consolidate all other related bills to come up with a substitute bill for approval.
The committee, chaired by Qurino Rep. Dakila Carlo Cua, would then vote on the substitute bill. Cua is also the main author of HB 4774.
Dominguez noted the “congressional action on the first phase of the DoF-proposed CTRP would help create a strong buffer that will insulate the country from the surge of protectionism now sweeping across the glob e, and thereby keep the economy on its targeted annual expansion of 7 percent or better.”
“By doing so, the Congress would let the Duterte administration gain headway in its ambitious medium-term agenda to keep the country among Asia’s fastest-growing economies, cut the poverty rate from 21. 6 percent to 14 percent, and transform the country into an upper-middle economy by way of investment-driven in lieu of consumption-led growth,” he said.
Most of the committee members have apparently seen that the domestic economy is in its golden moment, Dominguez said. “If we fail to seize it, the conjuncture of opportunities will pass us and we will betray our people.”
The CTRP must be approved by both chambers of Congress in its entirety because the approval of just the highly-popular component—the sizeable cuts in personal income tax rates—would lead to revenue shortfalls and an unmanageable deficit spending that would have dire consequences for the country, he added.