‘Fixing tax system to hike PHL revenues by P433B’
June 19, 2017 at 15:30
‘Fixing tax system to hike PHL revenues by P433B’
The government can collect some P433 billion in additional revenues, equivalent to 2.7 percent of GDP, by implementing reforms in the Bureau of Internal Revenue’s (BIR) tax policy and administration, according to the Department of Finance (DOF).
Finance Undersecretary Karl Kendrick T. Chua said the Duterte administration’s Comprehensive Tax Reform Program (CTRP) would help eliminate the loopholes and inefficiencies in the Philippine taxation system.
“We can potentially collect around P433 billion, or 2.7 percent of GDP, based on 2017 prices, if we simplify, address inefficiencies and remove loopholes in BIR’s tax administration and tax policy, as well as improve governance,” Chua said.
“The amount is already lower than the 2006 estimate of P726 billion, given stronger tax administration in the last seven years,” he added.
Chua said, tax administration efficiency has improved by as much as 40 percent since 2006, when the World Bank started measuring the Philippines’s tax gap.
“In fact, the key reasons for weak tax collection are the large number of tax exemptions and incentives that give rise to discretion and negotiations, and thus, tax evasion and even corruption. Removing unnecessary exemptions and incentives will make the tax system fairer and easier to administer, thereby increasing collections,” he added.
Among the tax-policy reforms proposed by the Duterte administration in Package 1 of the CTRP include broadening the value-added tax (VAT) base while retaining exemptions for seniors and persons with disabilities, updating the excise tax rates for fuel and automobiles, and lowering personal income-tax (PIT) rates.
House Bill (HB) 5636, or the Tax Reform for Acceleration and Inclusion Act (TRAIN), was approved by the House of Representatives on May 31 before Congress’s sine die adjournment. TRAIN comprises Package 1 of the CTRP.
The DOF said it hopes the Senate would act swiftly on the bill when Congress opens its second regular session in July and retain the original features of TRAIN outlined in HB 4774 being pushed by the agency.
“I’m very confident that our legislators are very aware of what is needed in the country, and are very responsive to what the country needs. I’m very confident that we will all sit together, and reason together, and come to a bill that will be good for country,” Finance Secretary Carlos G. Dominguez III said.
Earlier, the BIR reported revenue collections totaling P719.952 billion from January to May 2017, which fell short of the P759.287-billion target for the period.
Source: https://www.businessmirror.com.ph/fixing-tax-system-to-hike-phl-revenues-by-p433b/
