MANILA, Philippines – A tax reform law that generates less than P133 billion in revenue is no longer acceptable for Finance Secretary Carlos Dominguez III. 

In a press conference in Malacañang on Thursday, July 6, Dominguez said that if Congress passes a tax reform law, it should not be diluted more than the House of Representatives’ version.

The lower house’s version will generate P133 billion in revenue from taxes on sugary products, fuel, and cars, but is a diluted version of a tax reform package crafted by Duterte’s economic advisers which would have generated P162 billion in revenue, according to their projections.

“Of course, we want the P162 billion as much as possible and we will still fight for it, but we respect the legislative in their wisdom, and we think the package of P130 [billion] is about okay,” said Dominguez. 

Asked if a package that leads to less revenue is acceptable for him, he said, “No.”

The House passed its version of the bill last May 31. The Senate, however, is poised to reject the Duterte administration’s version of the bill.

But Dominguez is optimistic that senators will eventually pass the bill, even in modified form.

“All of the senators are reasonable and intelligent people. When they see the real facts and figures they will, I think, be firmly convinced that it’s moving forward,” he said. 

The passage of the bill in the lower chamber, he said, is an indication that the package “may be enacted into law shortly after Congress resumes in July.”

Dominguez underscored that passing the tax reform package is necessary for funding the Duterte government’s Build, Build, Build infrastructure program, which aims for infrastructure spending to reach 7% of gross domestic product by 2022. 

He sought to dispel the notion that the tax reform package is “anti-poor.”

He pointed out that a key aspect of the package is reduction of income tax such that those earning annual salaries of P250,000 or less will not have to pay income tax at all. Around 83% of tax payers have such salaries and will thus benefit from this provision.

While proposed additional taxes will lead to price increase of sugary products, fuel, and cars, he said the reduced income tax and tax breaks will help citizens pay for these additional costs.

The tax reform package also provides for a cash transfer program to help the poorest families cope with the price increases, he said.

The large infrastructure projects which would be partially funded by the tax reform package will also benefit the poor.

“With better roads, with better bridges, with better wifi infrastructure, more investments will come in and more jobs will open up for the poor people,” said Dominguez. 

“We need better schools, we need better infrastructure, we need better healthcare and we have to pay for it,” he underscored.

Lawmakers have opposed parts of the bill, saying the proposed taxes on sugary products, fuel, and cars will burden the poorest Filipinos.  

President Rodrigo Duterte has certified the tax reform bill as urgent last May 29. – Rappler.com