MANILA, Philippines – Finance Secretary Carlos Dominguez III noted that the 17th Congress tried to pass over a hundred bills that were simply financially unsustainable.
His solution: legislators and the economic team meet on a weekly basis to align the executive and legislative branches’ reform agenda.
Dominguez said in an emailed statement on Thursday, June 27, that weekly meetings between the economic team and Congress would prevent approved bills from being vetoed by President Rodrigo Duterte for “going beyond the limits of fiscal discipline.”
“These vetoes do not mean that we do not support you. The President’s vetoes invite us to take another approach,” Dominguez said.
In the 17th Congress alone, lawmakers proposed 147 bills that Dominguez believed would collectively erode revenues by P178 billion and mandatorily add P799 billion to the budget. These amount to a whopping P977 billion that the government cannot afford to implement.
Congress also had 31 bills which sought to create more freeports or ecozones. Dominguez said the Philippines already has 546 tax-free areas and adding more would be contributing to massive leakages in revenue collection.
“We do not think this is how we should do policy – that is create more tax-free zones or sectors, and ask other Filipinos to pay for these incentives. Surely there is a better way to help everyone,” he said.
The Department of Finance is pushing for the approval of the Tax Reform for Attracting Better and High-Quality Opportunities (Trabaho) bill, which aims to reduce corporate income tax and takes out some tax perks of companies. (READ: EXPLAINER: Why the government is pushing for 2nd TRAIN package)
The proposal has drawn mixed reviews, with some foreign companies allegedly backing out from investing due to the uncertainties of the Philippines’ tax and incentive system. Labor groups also fear that the Trabaho bill would ironically result in thousands of job losses. – Rappler.com