“Having fair, simple and easy-to-comply tax laws will help improve the ease of doing business in the country and will encourage more local and foreign investments,” the Management Association of the Philippines (MAP) said in a statement yesterday. STAR/File photo
MANILA, Philippines – Local business groups have reiterated their support to the Duterte administration’s tax reform plan, citing its importance in making the country a more attractive investment destination.
“Having fair, simple and easy-to-comply tax laws will help improve the ease of doing business in the country and will encourage more local and foreign investments,” the Management Association of the Philippines (MAP) said in a statement yesterday.
“The MAP fully supports the tax reform package of the Duterte administration for a simpler, equitable, and efficient tax system that would encourage voluntary compliance, lower the compliance cost, promote progressivity, and expand the tax base while spreading the tax burden,” the group added.
The MAP is urging the Department of Finance (DOF), the Senate, and the House of Representatives to exhaust all possible means to make the tax system simpler to administer, fairer to taxpayers, and more attractive to investors.
The business group said the enactment of a holistic tax reform measure would correct current inequities, encourage compliance, and pursue measures that would counter the effects of tax rate adjustments.
The Philippine Chamber of Commerce and Industry (PCCI), the country’s largest business organization, has also aired its support to the comprehensive tax reform program being proposed by the DOF.
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PCCI president George Barcelon lauded the government’s initiatives to reform the country’s tax system, saying it is high time that inefficiencies and loopholes are plugged.
“Widening the tax base, simplifying the tax structure, and making the system easier to administer will significantly minimize tax evasion, improve compliance and collection, and make the system equitable and efficient,” Barcelon said.
PCCI said the comprehensive tax reform program would play a significant role to meet the government’s commitment to increase and accelerate delivery of infrastructure projects and social services.
To further increase tax collection, the group is also pushing for a special tax regime for micro and small enterprises to encourage this taxpayer segment to be compliant.
The administration-backed tax reform package will be submitted to Congress on Monday, with government support ensuring its passage although not likely by the end of the year as targeted.
The first of four packages meant to amend the nearly two-decade-old National Internal Revenue Code will be handed to the House Ways and Means Committee “on Monday, 10 a.m.,” the Department of Finance said yesterday.
“The tax reform package may be described as the linchpin of the broader reform package envisioned by the Duterte administration,” Finance Secretary Carlos Dominguez said in a statement.
Chances are high it will be passed, although at this early, the House committee that will tackle it tried to temper expectations it will be in effect by next year as DOF earlier said.
“Our target is to bring it to the plenary by the end of the year,” said committee chairman Quirino Rep. Dakila Carlo Cua.
“Definitely, it will be passed, it’s just a question when,” he said in a phone interview.
As promised by President Duterte during his campaign, the first of four packages aims to lower personal income taxes by restructuring the tax brackets that currently impose a maximum of 32 percent on earnings of more than P500,000.
Under the plan, the 32 percent will now be charged for those earning between P3 and P5 million every year, while a new 35-percent levy will be slapped on those with more than P5 million.
To offset revenue losses, excise taxes on oil will be adjusted, with diesel no longer exempted, while exemptions to value-added tax will also be reduced.
Dominguez said a “uniform” excise tax on sweetened beverages worth P10 per liter will also be imposed. – With Prinz Magtulis