FINANCE Secretary Carlos Dominguez 3rd said on Thursday he was looking to reduce the documentary stamp tax (DST) and abolish the travel tax in the future.
At the joint meeting of the Rotary Club of Makati West and Rotary Club of Manila in Makati City, Dominguez said a higher DST was not part of the government’s Comprehensive Tax Reform Program (CTRP) and was only inserted during the bicameral conference committee on the Tax Reform for Acceleration and Inclusion Act (Train).
According to the National Tax Research Center (NTRC), the DST is a tax upon documents, instruments, loan agreements and papers proving the acceptance, assignment, sale or transfer of an obligation, right or property incident thereto and in respect of the transaction so had or accomplished.
Under Train, DST rates on these papers, like bank checks, doubled from P1.50 to P3.
Meanwhile, the DST rate on the issue price of all debt instruments increased by 50 percent, or from P1 to P1.50 on each P200.
“During the time when we [were having the] bicam, the [Department of Finance] was not allowed to speak, so that was inserted, and unfortunately we were unable to register our objection [to] that,” Dominguez explained.
“We definitely don’t agree with it and hope that, in some future legislation, the DST will be reduced,” he said.
On the travel tax, the Finance chief said his department “will look at its elimination” if the proceeds from it continued to be unused.
“I had a meeting with the Tieza [Tourism Infrastructure and Enterprise Zone Authority] people recently, and I noted that they have P14 billion in their account. And I told them if they don’t spend it, I will take it away,” Dominguez said.
The NTRC defines this tax as one imposed by the national government on all its citizens, permanent resident aliens and non-immigrant aliens who have stayed in the Philippines for more than a year and are traveling to other countries.
It says the tax is used to generate much-needed funds for tourism-related programs and projects.
Tieza is the government agency mandated by law to collect the travel tax.