The Department of Finance (DOF) said former finance and economic managers have given their full support to a comprehensive tax reform program the administration submitted to Congress last September.
The package is supposed to correct the structural weaknesses in the country’s tax system and serve as a tool to decisively attack poverty and achieve inclusive growth.
In a statement on Monday, the DOF said 19 former heads and deputy chiefs of the DOF and the National Economic and Development Authority (NEDA) fully endorsed the tax reform proposals.
They expressed in a manifesto their solidarity with the NEDA goal of transforming the Philippines into a prosperous, predominantly middle-class society in one generation or by year 2040, the department said.
“We, the former Secretaries and Undersecretaries of the DOF and the NEDA fully support the DOF’s comprehensive tax reform program as a long needed corrective to our tax system’s structural weaknesses and as a tool to achieve inclusive growth and transformative poverty reduction in our country,” the government executives were quoted as saying in a joint statement.
The DOF’s proposed comprehensive tax reform is progressive, timely and well-crafted to achieve the vision of a prosperous Philippines free of poverty, they claimed.
“For these reasons we strongly support the reform and urge the public to do the same,” they said.
The manifesto was signed by former Finance secretaries Cesar Virata, Jose Isidro Camacho, Jesus Estanislao, Roberto De Ocampo, Jose Pardo, Cesar Purisima and Juanita Amatong; and former NEDA Directors-General Arsenio Balisacan, Emmanuel Esguerra, Cielito Habito, Felipe Medalla and Romulo Neri.
It was also signed by ex-DOF Undersecretaries Joel Bañares, Romeo Bernardo, Cornelio Gison, Lily Gruba, Milwida Guevara, Jose Emmanuel Reverente and Florencia Tarriela, the department said.
“Overall, tax policy reforms are needed to make the tax system fairer, simpler, and more efficient, to put more money in people’s pockets, and encourage investment, job creation, and poverty reduction, while making our country more competitive regionally,” they said in the manifesto.
They share the NEDA goal that by 2040 the Philippines would be a prosperous, predominantly middle-class society where no one is poor, and people will live long, healthy lives, be smart and innovative, and live in a high-trust society.
“The Philippine government aims to triple real per capita incomes and eradicate hunger and poverty by 2040, if not sooner,” they said. “We fully endorse the DOF’s tax reform as part of the solution toward achieving these aims.”
For them, the Duterte administration should carry out the proposed tax plan right away so it could sufficiently bankroll its inclusive growth and 2040 agendas, as tax administration and budget reforms could never raise the high level of revenues needed for the unparalleled investments in infrastructure, human capital and social protection for the poor and other vulnerable sectors.
The DOF’s proposed tax reforms are needed, they said, to correct the domestic tax system’s weaknesses that make the economy less competitive relative to its neighbors and deprive people of deeply needed investments to improve their lives.
The DOF submitted to the Congress last September the proposed tax program’s first package, anchored on personal income tax cuts primarily for the benefit of wage earners and other low- and middle-income taxpayers.
To offset the projected revenue loss from lower personal income tax rates, Package 1 of the DOF reform package includes revenue-enhancing measures that seek to index the fuel excise tax to inflation, restructure the tax on automobiles and expand the value-added tax (VAT) base.
A hefty par t of the revenue to be raised from the proposed tax plan will supposedly go to highly-targeted, time-bound transfer programs to cushion the impact of the planned tax rate adjustments on the poor and other vulnerable sectors.