First 18 months crucial for tax reforms — Dominguez
On the sidelines of the Bureau of Internal Revenue’s anniversary celebration, Finance Secretary Carlos G. Dominguez III emphasized that the first 18 months of the current Congress is crucial for the Duterte administration’s comprehensive tax reform program (CTRP).
According to Dominguez, lawmakers traditionally have the tendency to focus “on something else” as the next presidential elections approach.
“That is our target,” Dominguez told reporters when asked if the DOF can successfully push for the passage of the remaining CTRP packages within the term of House Speaker Alan Cayetano. “Once you hit 2021 — you just look at what happened in 2015 — everybody starts focusing on something else.”
While Dominguez remains optimistic that the political attitude under President Duterte is different, the finance department is still taking a conservative stand when it comes to political play during the final months of the administration.
“I don’t think that it will be that much [under President Duterte’s watch], but this is the reality that we have to face, so we have to finish this thing [CTRP] in 15 to 18 months,” the finance chief said.
“It’s not Cayetano’s [term], it’s basically between 15 and 18 months is the most productive time. I’m not saying nothing will happen but the destruction will be more than normal [in 2021],” he added.
Last month, President Duterte supported the House speakership bid of Cayetano, a representative from Taguig and Duterte’s former Foreign Affairs Secretary. However, the chief executive’s endorsement is under a term-sharing scheme.
Under the agreement, Cayetano will serve as House speaker in the first 15 months of 18th Congress, then the next 21 months are for Marinduque Rep. Lord Allan Velasco, a known close friend of businessman Ramon S. Ang.
In his speech before the taxmen last week, Dominguez said the remaining tranches of the CTRP need to be approved by the Congress and implemented soonest.
He cited, in particular, the passage of CTRP’s second package that aims to lower the corporate income tax (CIT) rate and rationalize investment incentives.
Dominguez also said reforms in the land valuation system and simplifying the complex tax rates in the financial sector, among others, require immediate action by Congress.
He underscored the need for a general tax amnesty that should include the lifting of bank secrecy for fraud cases and the automatic exchange of tax information among regulatory agencies.
Dominguez said the measure further increasing the excise taxes on alcoholic beverages and e-cigarettes should be passed by Congress not just to raise funds for the universal health care, but at the same time to promote a healthier society.